Dr. Rakeen Mabud Reacts to July CPI Report

Dr. Rakeen Mabud Reacts to July CPI Report

Today, the Bureau of Labor Statistics (BLS) released its Consumer Price Index Report, which shows year-over-year headline inflation at 3.2%, a slight uptick from last month’s low of 3.0%, but a dramatic drop from last summer’s 9.1% peak.

Groundwork’s Chief Economist Rakeen Mabud reacted to today’s CPI numbers with the following statement:

“Inflation in July is dramatically lower than it was last summer, as pandemic-induced shocks and corporate profiteering continue to abate.

“The Fed’s dangerous commitment to getting inflation down to 2% through additional rate hikes, with no regard for the livelihoods of millions of workers, risks destroying our economy’s delicate balance of low inflation, low unemployment and higher wages. It’s time to end these rate hikes for good.”

Email press@groundworkcollaborative.org to speak with Dr. Mabud about today’s CPI report and how it could affect the Federal Reserve’s interest rate decisions.

Groundwork Analysis

• Inflation has sharply declined. Compared to the highs of June 2022 – when inflation reached 9.1% –  inflation has fallen substantially while our labor market has stayed resilient in the face of aggressive rate hikes.
• Inflation is likely lower than the headline number would suggest. Shelter prices accounted for over 90% of the increase in the headline number, but CPI’s lagged measure of housing costs is generally behind market data by up to one year and does not reflect the dramatic drop in housing inflation since last summer. More recent data suggest that housing prices have already cooled.

• We must double down on the success of public investments. Investments made in the Inflation Reduction Act, CHIPS Act, and Bipartisan Infrastructure Law are an important bulwark against the Fed’s relentless rate hiking campaign. These policies are building resilience in our supply chains and transitioning us away from volatile fossil fuels. Policymakers must also continue to tackle the long-term drivers of the affordability crisis by investing in housing, education, care infrastructure, clean energy, and more.