(Bloomberg) – President Joe Biden celebrated monthly declines in consumer prices despite warnings from Federal Reserve Chairman Jerome Powell against overconfidence in one-month data A potential political tailwind for him.
The U.S. personal consumption expenditures price index, which is used to set inflation targets, fell 0.1% in July from the previous month, the first negative reading since the start of the pandemic, data from the U.S. Commerce Department showed on Friday. The same report also showed a rise in personal income, although consumer spending fell short of economists’ expectations.
“The American people are starting to get some relief from the high prices,” Biden said in a statement.
READ MORE: U.S. spending remains subdued even as Fed inflation gauge eases
Biden has been struggling to ease inflation and touts gasoline prices across the board The course steadily declined over the summer. He also signed the Reducing Inflation Act, which aims to moderately alleviate price pressures in the medium and long term.
Powell echoed July’s inflation data, with a separate report earlier this month showing prices were unchanged from June – still higher than a year ago, but likely to peak.
“The one-month improvement is nowhere near what the committee needs to see before we can be confident that inflation is falling,” Powell said Friday in Jackson Hole, Wyoming. “While higher interest rates, slower growth and weaker labor market conditions will lower inflation, they will also cause some pain for households and businesses. These are the unfortunate costs of lower inflation.”
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