Head Office
No. 8 Klunye Adjele Street
East Legon, Accra – Ghana
The government’s latest inflation snapshot landed Wednesday morning with a mixed message: prices are still climbing, but a little more slowly than before and for many households, paychecks aren’t catching up.
The Numbers
The Consumer Price Index <cite index=”3-1″>rose 0.1% on a seasonally adjusted basis in July, after falling 0.4% in June</cite>, the Bureau of Labor Statistics reported. On an annual basis, prices were <cite index=”1-1″>up 3.4% from a year earlier</cite>, a slight cooldown from June’s 3.5% reading. Economists had largely expected this outcome — <cite index=”1-1″>the figures matched estimates from a survey of economists conducted by LSEG</cite>.
Behind the modest headline number was a familiar culprit: energy. <cite index=”2-1″>Gasoline prices fell 2.9% for the month, though crude oil was already climbing again by the time the report came out</cite>, with <cite index=”2-1″>Brent crude touching $90 a barrel and U.S. crude nearing $84</cite> on Wednesday morning. <cite index=”2-1″>The national average for a gallon of regular gas ticked back up to $4.03</cite> the same day — a reminder that July’s energy relief may already be fading. <cite index=”2-1″>Electricity prices barely moved, edging up just 0.1%</cite>.
Elsewhere in the report, <cite index=”2-1″>medical care, airline fares, communication, education and recreation all got more expensive</cite>, while <cite index=”2-1″>motor vehicle insurance was one of the few categories that got cheaper</cite>.
The Part That Doesn’t Show Up in the Headline Number
The report’s more uncomfortable detail sits a layer beneath the topline figure: <cite index=”2-1″>annual inflation of 3.4% is still running ahead of wage growth, which was pacing at 3.2% as of last month</cite>. <cite index=”2-1″>Average hourly earnings actually slipped 0.2% year-over-year</cite>, according to the BLS.
<cite index=”2-1″>Heather Long, chief economist at Navy Federal Credit Union, noted on social media that inflation has been outpacing wage gains for four straight months</cite>, adding that this dynamic is the central concern for <cite index=”2-1″>middle- and lower-income households, who are likely facing more belt-tightening ahead</cite>.
A New Fed Chair, an Old Fight
This is the first CPI report to land squarely under Kevin Warsh’s watch as Federal Reserve Chair — he took over from Jerome Powell in May. Warsh has been notably blunt about where he stands. In his first congressional testimony since taking the job, he told the House Financial Services Committee that policymakers have <cite index=”10-1″>”no tolerance for persistently elevated inflation”</cite> and are committed to <cite index=”10-1″>bringing inflation back to a 2% annual pace</cite>.
Weeks earlier, at a central banking forum in Sintra, Portugal, he put it more plainly still: anyone expecting the Fed to settle for inflation above target, he said, <cite index=”14-1″>”would be disappointed”</cite>.
That hawkish tone puts Warsh at odds with the political pressure surrounding his appointment. President Trump pushed for lower interest rates throughout his dispute with Powell, and installed Warsh in part on the expectation of a friendlier Fed. Warsh has pushed back on that framing too, telling the same hearing that the Fed will remain independent <cite index=”10-1″>regardless of the administration’s preferences</cite>.
He’s also inherited a divided committee. Fed policymakers are roughly split, with <cite index=”11-1″>about half the committee’s members penciling in higher rates by year-end, and the other half favoring holding steady or cutting</cite>.
What’s Next
The BLS is scheduled to release the August inflation report on <cite index=”3-1″>Friday, September 11, at 8:30 a.m. Eastern</cite>. Between now and then, the trajectory of oil prices — tangled up in an ongoing Middle East conflict — will likely determine whether July’s dip in gas prices was a genuine turning point or just a pause.
For now, the Fed finds itself where it’s been for much of the year: publicly committed to bringing inflation to heel, short on consensus about how fast to move, and working under a president eager for the opposite.
