Symbolic imageUS inflation eases to 3.4% as the Fed stays split
US consumer prices rose 0.1 percent in July and the annual rate slipped to 3.4 percent, figures released on Wednesday showed. Subdued core inflation buys the Federal Reserve time.
Core inflation, excluding food and energy, rose 0.2 percent on the month and 2.5 percent on the year, after 2.6 percent in June, when the headline rate was 3.5 percent, the Bureau of Labor Statistics reported. FAZ noted that the Fed's preferred gauge is higher: the PCE index stood 3.7 percent above a year earlier in June, its core rate at 3.3 percent.
The Fed remains divided
Diane Swonk of KPMG said the figures would hardly settle the argument inside the Fed between those pressing for a rate rise and those wanting to hold; Bloomberg reported that JPMorgan expects no move.
Jobs lost, weaker wages
The US economy shed 23,000 jobs in July while the unemployment rate fell to 4.1 percent. Elise Gould of the Economic Policy Institute called that a drop for the wrong reasons, since people left the labour force, and said wage growth of 3.2 percent, weaker than in June, showed little bargaining power.
Energy the wild card
Energy prices fell 1.5 percent in July after a temporary ceasefire with Iran, yet stood 14.7 percent above a year earlier. Fighting has resumed since, which FAZ said could lift the next reading; Moody's chief credit officer called energy the wild card.
Other opinions
Bloomberg framed the reading as benign and the core rate as subdued, while The American Conservative called inflation stubborn and FAZ saw the Fed left uncertain.