Here’s the inflation breakdown for July 2024 — in one chart
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Inflation continued to retreat in July, aided by easing price pressures for consumer staples like food and energy and physical goods like new and used cars.
The consumer price index, a key inflation gauge, rose 2.9% in July from a year ago, the U.S. Department of Labor reported Wednesday. That figure is down from 3% in June and the lowest reading since March 2021.
The CPI gauges how fast prices are changing across the U.S. economy. It measures everything from fruits and vegetables to haircuts, concert tickets and household appliances.
“I think it’s right down the strike zone,” Mark Zandi, chief economist of Moody’s, said of the CPI report.
Perhaps the most important thing for consumers is inflation for groceries “continues to grow very slowly,” Zandi said.
Combined with similar good news for other necessities like gasoline and market rents for new tenants, “that’s really encouraging news, particularly for the lower-income consumers that are the most hard pressed,” he added.
Inflation guides Fed interest rate policy
The July inflation reading is down significantly from the 9.1% pandemic-era peak in mid-2022, which was the highest level since 1981.
It’s also nearing policymakers’ long-term target, around 2%.
“We think we’re though the worst of it from an inflation perspective,” said Joe Seydl, senior markets economist at J.P. Morgan Private Bank.
The U.S. Federal Reserve uses inflation data to help guide its interest rate policy. It raised rates to their highest level in 23 years during the Covid-19 pandemic era, pushing up borrowing costs for consumers and businesses in a bid to tame inflation.
Recent labor market data has spooked some investors, who fear it signals a U.S. recession may be near. Many economists say those concerns are overblown, at least for now.
Nonetheless, easing inflation coupled with a cooler labor market make it likely that Fed officials will start cutting interest rates at their next policy meeting in September, economists said. Doing so would reduce borrowing costs, helping buoy the economy.
“In short, this CPI report represents more good data and adds to the evidence supporting a [0.25 percentage point] September rate cut,” Paul Ashworth, chief North America economist at Capital Economics, wrote in a note Wednesday.
Housing is a stumbling block
Housing is the one major impediment keeping inflation elevated above the Fed’s target right now — on paper, at least, economists said.
Shelter is largest component of the CPI, and therefore has an outsized effect on inflation readings.
The shelter index has risen 5.1% since July 2023, accounting for more than 70% of the annual increase in the “core” CPI, the BLS said Wednesday. (The core CPI is economists’ preferred gauge of inflation trends. It strips out food and energy costs, which can be volatile.)
After declining to 0.2% in June on a monthly basis, shelter inflation jumped back to 0.4% in July, the BLS reported.
Housing inflation moves up and down at glacial speed due to how the government measures it, economists said. Such data quirks mask positive news in the real-time rental market, which has seen inflation flatline for about two years, Zandi said.
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Excluding shelter — which is likely warranted given measurement issues — “we’re at the Fed’s target and then some,” Zandi said.
“Mission accomplished, in my view,” he said of the fight against inflation.
After stripping out shelter, the CPI rose 1.7% in July, below the Fed’s annual target.
Economists broadly expect shelter CPI inflation to continue to throttle back slowly given prevailing trends for market rents.
Other ‘notable’ categories
Motor vehicle insurance, medical care, personal care and recreation are some other indexes with “notable” increases over the last year, according to the BLS.
Prices in those categories are up 18.6%, 3.2%, 3.4% and 1.4%, respectively.
A surge in new and used car prices a few years ago is likely now fueling high inflation for car insurance premiums and vehicle repair, since it generally costs more to insure and repair pricier cars, economists said.
Insurance inflation should ultimately fade alongside falling car prices, they said. New vehicle prices are down 1% over the past year, and those for used cars and trucks have declined almost 11%.
Egg prices — which had surged in 2022 due to a historic outbreak of bird flu — are rising again following a reemergence of the deadly disease. They’re up 19% from a year ago.
Other food categories including bacon and crackers are up over the past year (by 8.5% and 3%, respectively), but their prices fell during the month of July, suggesting more potential declines ahead.
Overall annual grocery inflation was 1.1% in July, down from an average 11.4% in 2022, which was the highest since 1979.
How supply and demand impacted inflation
Inflation for physical goods spiked as the U.S. economy reopened in 2021. The Covid-19 pandemic disrupted supply chains, while Americans spent more on their homes and less on services such as dining out and entertainment.
It is a different story now. Goods inflation has largely normalized, while the services sector is a fly in the ointment, economists said.
However, services inflation — generally more sensitive to labor costs — should ease further due to a slacker job market and declining wage growth, economists said.
High interest rates have also served to reduce overall inflation by reducing demand, Seydl said.
Environment
U.S. crude oil falls below $60 a barrel to lowest since 2021 on tariff-fueled recession fears
A view shows disused oil pump jacks at the Airankol oil field operated by Caspiy Neft in the Atyrau Region, Kazakhstan April 2, 2025.
Pavel Mikheyev | Reuters
U.S. oil prices dropped below $60 a barrel on Sunday on fears President Donald Trump’s global tariffs would push the U.S., and maybe the world, into a recession.
Futures tied to U.S. West Texas intermediate crude fell more than 3% to $59.74 on Sunday night. The move comes after back-to-back 6% declines last week. WTI is now at the lowest since April 2021.
Worries are mounting that tariffs could lead to higher prices for businesses, which could lead to a slowdown in economic activity that would ultimately hurt demand for oil.
Oil futures, 5 years
The tariffs, which are set to take effect this week, “would likely push the U.S. and possibly global economy into recession this year,” according to JPMorgan. The firm on Thursday raised its odds of a recession this year to 60% following the tariff rollout, up from 40%.
Fueled by incentives from the Illinois EPA and the state’s largest utility company, new EV registrations nearly quadrupled the 12% first-quarter increase in EV registrations nationally – and there are no signs the state is slowing down.
Despite the dramatic slowdown of Tesla’s US deliveries, sales of electric vehicles overall have perked up in recent months, with Illinois’ EV adoption rate well above the Q1 uptick nationally. Crain’s Chicago Business reports that the number of new EVs registered across the state totaled 9,821 January through March, compared with “just” 6,535 EVs registered in the state during the same period in 2024.
Those numbers represent more than 50% growth in EV registrations – far beyond the expected 12% first-quarter increase nationally being projected by Cox Automotive. (!)
What’s going on in Illinois?
While President Trump and Elmo were running for re-election, they campaigned on the threat promise of canceling the $7,500 federal tax credit for EVs. Along with California Governor Gavin Newsom, Illinois’ Governor JB Pritzker made countermoves – launching a $4,000 rebate for new electric cars and up to $1,500 for the purchase of a new electric motorcycle.
At the same time, the state’s largest utility, ComEd, launched a $90 million EV incentive program featuring a new Point of Purchase initiative to deliver instant discounts to qualifying business and public sector customers who make the switch to electric vehicles. That program has driven a surge in Class 3-6 medium duty commercial EVs, which are eligible fro $20-30,000 in utility rebates on top of federal tax credits and other incentives (Class 1-2 EVs are eligible for up to $7,500).
We covered the launch of those incentives when the program was announced at Chicago Drives Electric last year, but the message here is simple: incentives work.
SOURCES: Chicago Business, Ray Cunningham; featured image by the author.
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The electric construction equipment experts at XCMG just released a new, 25 ton electric crawler excavator ahead of bauma 2025 – and they have their eye on the global urban construction, mine operations, and logistical material handling markets.
Powered by a high-capacity 400 kWh lithium iron phosphate battery capable of delivering up to 8 hours of continuous operation, the XE215EV electric excavator promises uninterrupted operation at a lower cost of ownership and with even less downtime than its diesel counterparts.
XCMG is delivering on part of that reduced downtime promise with the lower maintenance and easier repair needs of electric equipment, and delivering on the rest of it with lickety-quick DC fast charging that can recharge the machine’s massive battery in 1.5-2 hours … but that’s not the slick bit. The XCMG XE125EV can be powered up without leaving the job site thanks to its BYD battery swap technology.
We first covered XCMG and its battery swap technology back in January, and covered similar battery-swap tech being developed by MOOG Construction offshoot ZQUIP, as well – but while XCMG’s battery tech has been in production for several years, it’s still not widely known about in the West (even within the industry).
XCMG showed off its latest electric equipment at the December 2024 bauma China, including an updated version of its of its 85-ton autonomous electric mining truck that features a fully cab-less design – meaning there isn’t even a place for an operator to sit, let alone operate. And that’s too bad, because what operator wouldn’t want to experience an electric truck putting down 1070 hp more than 16,000 lb-ft of torque!?
Easy in, easy out
The best part? All of the company’s heavy equipment assets – from excavators to terminal tractors to dump trucks and wheel loaders – all use the same 400 kWh BYD battery packs, Milwaukee tool style. That means an equipment fleet can utilize x number of vehicles with a fraction of the total battery capacity and material needs of other asset brands. That’s not just a smart use of limited materials, it’s a smarter use of energy.
You can check out all the XE215EV’s specs at this tear sheet, and get an in-person look at the Chinese company’s latest electric excavator this week in Munich, Germany.
SOURCE | IMAGES: XCMG.
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