For the first time in more than two years, overall inflation didn’t rise at all in July. It’s another early sign that the white-hot inflation that has plagued the economy could be abating. Meanwhile, several data points offer a muddled picture, at best, of where the economy is headed.

Consumer Price Index shows prices in July increased 8.5 percent over the past year. Even consumers are telling the Fed that their long-term fears of inflation are subsiding. The latest Consumer Price Index data showed prices in June increased by 0.2 percent. The July increase reflects price spikes from previous months.

Consumer spending is slowing but still strong. There was no change in prices from June. “We are turning the corner on inflation,” Moody’s Analytics Chief Economist Mark Zandi says. The new report is a welcome development for the White House. It follows recent legislative victories that Democrats say will fight inflation.

New survey data published by the New York Fed on Monday found that consumers are softening expectations that runaway prices will continue to eviscerate their paychecks. Those expectations play a key role in the central bank’s decisions on how much to raise rates. It could also blunt Republican attacks that the administration — and the Fed — vastly miscalculated the rise in the cost of living.

Americans now expect gas prices to rise 1.5 percent — compared to 5.7 percent just a month ago. Food prices are expected to rise 6.7 per cent, a decline of 2.5 percentage points. “Even if it comes down a little bit, it’s still going to be bad,” Sen. Rick Scott of Florida said.
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