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Inflation report in the United States June 2023

Jesus Carames

May 15, 2024 | 3:29 p.m.

The latest inflation data in the United States show that the Consumer Price Index (CPI) is very much in line with expectations, providing some reassurance in the current economic context.

Inflation Data

On a monthly basis, the CPI increased by 0,3% compared to the expected 0,4% and 0,4% in the previous month. On an annual basis, the CPI stood at 3,4%, exactly as forecast, but slightly below the 3,5% previously recorded.

The core CPI, which excludes volatile food and energy prices, also showed smaller increases. On a monthly basis, the core CPI increased by 0,3%, in line with forecasts and below the 0,4% of the previous month. On an annual basis, the core CPI remained at 3,6%, in line with expectations, and falling from 3,8% previously.

Interpretation and Perspectives

These results are encouraging for the Federal Reserve (Fed) as they indicate that inflation is under control and in line with market expectations. The reduction in the monthly increase in the CPI is especially positive, suggesting that inflationary pressures could be moderating.

Despite these positive signs, annual inflation is still around 3,4%, which implies that, if this trend continues, inflation could approach 4% by the end of the year. This underscores the importance of continuing to closely monitor future data to ensure inflation does not accelerate again.

The Federal Reserve will need to carefully balance its policies to maintain economic growth without allowing inflation to get out of control. The Fed's future interest rate decisions will be crucial in this context, and upcoming inflation reports will play a key role in those deliberations.

In summary, although the current inflation data is reassuring, the need remains for continued vigilance and timely adjustments in economic policies to maintain stability.

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