This morning’s new inflation report showed a slight moderation in year-over-year inflation (2.5%) but with core inflation up 3.2% from a year ago. The year-over-year rate is the lowest since March 2021, the month that the American Rescue Plan was passed. But with inflation still well over 2%, this result seems to indicate there might be a smaller rate cut than Wall Street was hoping for, with markets initially dropping after the inflation news. While year-over-year inflation has moderated, prices are still not coming down. The Presidential Inflation Rate — the cumulative rate since the start of the Biden administration — remains over 20% (20.3%). The trend chart below shows the year-over-year rate (the red line) with the cumulative rate (Presidential Inflation Rate) in blue.
With the cumulative rate of inflation still over 20%, this means consumers are still not feeling relief. The cumulative rates of household expenses are still very high: food, 22.1%; gas, 45.8%; electricity, 30.7.%. The Harris campaign has pivoted from trying to sell good economic news as the Biden campaign had done with little success, to focusing on her plan to lower costs.
There is only one more inflation report (October 10) before the election, so the clock is running out on shaping the inflation narrative.