Tackling Inflation: Consumers Still Squeezed

23ABC News

Bringing down high price inflation is no easy task. And Thursday’s numbers from the federal government show just how challenging it is. A look at where and why consumers are still feeling the squeeze

Transcript

00:00 Turning now to the economy, bringing down high price inflation is no easy task and

00:05 today's numbers from the federal government show just how challenging it

00:08 is. Karen Kaifa is in Washington with a look at where and why consumers are

00:12 still feeling the squeeze. Economists not panicking about a slight uptick in

00:18 inflation last month, acknowledging that once it seeps into the economy it is

00:22 really hard to get it back down and certain areas remain stickier than

00:26 others. A bump along the Federal Reserve's road to a target inflation

00:32 rate of 2%. The Bureau of Labor Statistics said Thursday the consumer

00:35 price index rose 3.2% year-over-year in July, its first annual uptick in 13

00:41 months. Economists say there's more to that year-over-year figure, which is a

00:45 far cry from a 40-year high of 9.1% hit in June 2022. Well it's not quite

00:51 mission accomplished yet, but a significant progress on the inflation

00:57 front has been made. Housing costs remain stubborn, up 7.7% from one year

01:02 ago and pushing the overall annual index higher. The report said shelter costs

01:06 accounted for the bulk of a month-to-month increase in overall

01:09 consumer prices of 0.2%. With the housing market still coming down from

01:13 its screaming pandemic era highs and feeling the pressure of the Federal

01:17 Reserve's interest rate hikes to curb inflation, economists like Sung Won

01:21 Son of Loyola Marymount University expect a turnaround in shelter costs,

01:25 especially the rental market ahead. Sooner or later we will see rents

01:30 declining and that's going to bring down the inflation rate quite a bit.

01:35 Energy and food also saw slight upticks from June to July. Items like beef,

01:39 apples and coffee cost more, eggs, chicken and milk a little bit less. And

01:43 airline fares and used cars and trucks were among other areas that saw

01:47 decreases. The Federal Reserve will get another inflation report in mid

01:52 September. They'll also get another read on the jobs market before they

01:55 make their next decision on interest rates on September 20th. In Washington,

01:59 I'm Karen Kafa.

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