(Washington) Inflation may have slowed down slightly in August in the United States, thanks in particular to the fall in the price of gasoline, but the price rise, which is still very strong, is penalizing households and businesses, and remains a thorn in the foot of Joe Biden.
Posted at 7:02
The consumer price index (CPI), which refers to and is used to, in particular, index pensions, will be published Tuesday at 8:30 a.m. by the Labor Department.
The evolution of prices is expected at + 8% over one year and slightly down (-0.1%) compared to the previous month, according to the consensus of analysts from MarketWatch.
“We anticipate a fall in energy prices, led by gasoline, but we expect this to be partly offset by continued high food and housing inflation,” commented Pooja Sriram and Jonathan. Hill, economists for Barclays Research, in a note.
For a year and a half, prices have been soaring, eroding household purchasing power.
After reaching its highest level in over 40 years in June, inflation slowed in July to 8.5% over one year. It was even zero over a month, which means that prices had on average remained the same as in June.
A further slowdown in inflation would be welcome for Joe Biden two months before the crucial mid-term elections, and while the Republican opposition regularly accuses him of having, through his policy, largely contributed to this inflationary outbreak.
“Inflation is far too high and it is essential to reduce it”, hammered Sunday on CNN the secretary of the Treasury, Janet Yellen, acknowledging that there is “a risk” of recession, because of the actions carried out by the bank central US government (Fed) to slow the economy and thus contain inflation.
But “we have a solid labor market, and I believe it is possible to maintain it”, and, “in the longer term, we cannot have a solid labor market without inflation under control”, added Joe Biden’s Minister of Economy and Finance.
Soft landing unlikely
The Fed warned that it would continue to raise its key rates sharply. This pushes commercial banks to offer more expensive loans to their individual and business customers, who are less inclined to consume and invest, which should help ease the pressure on prices.
“Time is running out,” warned its president, Jerome Powell, on Thursday.
Another Fed official, Governor Christopher Waller, said on Friday that it “is still too early to say that inflation is slowing in a significant and lasting way.”
The Fed favors another measure of inflation, the PCE index, which also slowed in July (+6.3% year-on-year), and bringing it back to around the 2% considered healthy for the economy “will take some time. time “. But recession fears, which he said have “faded”, along with the strength of the labor market, give the Fed “the flexibility to be aggressive”.
The job market remains very tight with a shortage of workers. However, the unemployment rate rose a little in August, to 3.7%.
It is “unlikely” however, but “not impossible”, that the Fed achieves the “soft landing” it hopes for, i.e. to curb inflation by only slightly increasing unemployment, say economists Laurence Ball of Johns Hopkins University, and Daniel Leigh and Prachi Mishra of the IMF, in a paper published Wednesday by the Brookings Institution.
According to them, the Fed “will probably have to push unemployment well above its projection of 4.1%”.