Economists are expressing excitement as the June inflation report shows annual inflation dropped even more than expected, to the lowest level since March of 2021. The inflation rate for June was just 0.2%, bringing annual inflation to just 3%. One year ago it was over 9%. The New York Times calls it a “pronounced cooling” and “good news for consumers.”
“That’s an incredible drop from a year ago when inflation was 9.1% [year over year] in June 2022,” The Washington Post’s economic columnist Heather Long exclaimed. She adds another important note: “Wages are now rising faster than inflation.”
“One couldn’t ask for a better report on consumer price inflation,” announced Mark Zandi, chief economist at Moody’s Analytics. “Inflation is definitively throttling back, and while today’s report overstates the case, there is a strong case that inflation is headed in the right direction. The Fed should rethink the need for more rate hikes.”
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“WHOA!” declared University of Michigan professor of economics Justin Wolfers, in response to the 3% inflation news. “Inflation is returning to normal rates.”
Wolfers, known for his ability to translate economics into understandable terms, and his sense of humor, tweeted out a poll mocking naysayers.
The Federal Reserve has set 2% as the goal inflation rate. Compared to one year ago the nation is quickly heading to that number.
“I remember when Republicans predicted the Democrats’ Inflation Reduction Act would undermine the Fed’s efforts and actually increase inflation,” observed journalist, author, and former Clinton White House aide Keith Boykin.
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The headline at the conservative Washington Examiner reads: “Inflation drops to 3% in major boost for Biden and Bidenomics.”
“Wednesday’s report marks 12 straight months of declines in annual inflation after the rate peaked at a whopping 9.1% last June,” the Examiner’s Zachary Halaschak writes. “The June report marked the smallest rise in annual inflation since March 2021.”
President Biden in a statement said, “Good jobs and lower costs: That’s Bidenomics in action. Today’s report brings new and encouraging evidence that inflation is falling while our economy remains strong.”
“We’ve made this progress while unemployment remains near record lows and a higher share of working age Americans are in jobs now than in 20 years,” the President added. “Real wages for the average American worker are now higher than they were before the pandemic, with lower wage workers seeing the largest gains.”
How big is this?
On Twitter within a 30-minute time span various mentions of inflation trended at least five times.
Image: Official White House Photo by Erin Scott