As of September 13, 2024, U.S. import prices have fallen by 0.3% in August, marking the largest drop since December 2023. This decline follows a modest 0.1% gain in July and comes as economists had anticipated a decrease of 0.2% [98c02d80]. Year-on-year, import prices have risen by 0.8%, a slowdown from the 1.7% increase observed in July. Notably, imported fuel prices saw a significant drop of 3.0%, with petroleum products decreasing by 3.2%, while food prices edged down by 0.1% [98c02d80]. Core import prices, which exclude food and fuel, also slipped by 0.1% [98c02d80].
This latest data aligns with the broader trend of easing inflation in the U.S., where the annual inflation rate has decreased to 2.5% for the 12 months ending August 2024, down from 2.9% in July, according to government data released on September 11 [c4dab754]. The Federal Reserve is now contemplating a potential interest rate cut of 25 basis points at its upcoming meeting on September 18, 2024, as the current interest rate sits between 5.25% and 5.50% [98c02d80]. The Fed had previously raised rates by 525 basis points in 2022 and 2023 to combat inflation [98c02d80].
In addition to import price trends, the national unemployment rate remains at 4.3%, with initial jobless claims for the week ending August 31 reported at 227,000, indicating slight improvements in the job market [b87de278]. Core inflation, which excludes volatile food and energy prices, is currently at 3.2%, suggesting that while overall inflation is easing, there are still underlying pressures [c4dab754].
The International Monetary Fund (IMF) has projected U.S. economic growth of 2.7% for 2024, reflecting a stable outlook amid ongoing economic challenges [b87de278]. As the presidential election approaches, economic impacts on various sectors, including banking and renewable energy, are being closely monitored [b87de278].
Vice President Kamala Harris is facing criticism from Republicans regarding proposed tariffs that could potentially increase family expenses by $4,000, complicating the inflation narrative further [191b1da3]. As the Federal Reserve shifts its focus from inflation to unemployment, upcoming economic data will be crucial in guiding its monetary policy decisions [191b1da3].