The consumer price index report published by the Department of Labor shows that United States inflation dropped to 8.5% in July, marking a sharper fall from 9.1%.
This revelation has caught many by surprise in the Biden Administration, who had anticipated that the inflation was savoring due to several factors like the price increase and the Ukraine-Russian war.
“Today we received the news that our economy had zero percent inflation in the month of July. Zero percent.” Biden said at the White House
Crypto jumps higher
Bitcoin and other major cryptocurrencies, which have been in free fall for the greater months of 2022 due to macro concerns and the geopolitical climate, are rebounding strongly.
Most cryptocurrencies across the board declined on July 9 in expectation of the report, with bitcoin dropping about 4% to $23,100 after rising above $24,000 on Monday while Ethereum (ETH) fell by over 5%. Prices have bounced back, however, with bitcoin trading above $24,500 and Ethereum trading slightly below $1,900 at the time of press.
Biden aims to lower inflation
Reacting to the report, President Joe Biden emphasized that the current approach to curbing inflation was working and that Congress must pass the Inflation Reduction Act.
“The economic plan is working, and second is building an economy that will reward work,” Biden said in a press conference at the White House.
While inflation has been accelerating, it is reported that gross domestic product declined for the first two quarters of 2022 revealing that the economy was really priced. The report highlights that energy costs slowed for the month of July, falling 4.6%, despite maintaining a climbing curve in 2021 at 32.9%. Gasoline prices dropped by 7.7% month over month, providing some relief for drivers, but they were still 44% higher than the year before.
Food expenses continued to bump up, increasing by 1.1% over the month and rising 10.9% on a year-over-year basis, the largest increase since May 1979 according to pundits.
The data has attracted mixed reactions from those sensitive to inflation and monetary policy trends. The prospect of U.S. interest rates not rising as high as previously thought also pushed down the dollar, which fell more than 1% against a basket of currencies of major trading partners according to the New York Times.