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.
National Grid Renewables has broken ground on its 100 MW Apple River Solar Project in Polk County, Wisconsin.
The Wisconsin solar farm, which will use US-made First Solar Series 6 Plus bifacial modules, will be constructed by The Boldt Company, creating 150 construction and service jobs. Apple River Solar will generate over $36 million in direct economic benefits over its first 20 years.
Once it comes online in late 2025, Apple River Solar will supply clean energy to Xcel Energy, which serves customers throughout the Upper Midwest. According to National Grid Renewables, the solar farm will generate enough energy to power around 26,000 homes annually. It will also offset about 129,900 metric tons of carbon dioxide emissions each year – equivalent to taking 30,900 cars off the road.
“We are excited to see this project begin as it underscores our dedication to delivering clean, reliable and affordable energy to our customers,” said Karl Hoesly, President, Xcel Energy-Wisconsin and Michigan. “This project is an important step in those goals while bringing significant economic benefits to Polk County and the local townships.”
Electrek reported in February that Xcel Energy, Minnesota’s largest utility, expects to cut more than 80% – and possibly up to 88% – of its emissions by 2030, putting it on track to hit Minnesota’s goal of net zero by 2040. It also says it’s on track to achieve its clean energy goals for all the Upper Midwest states it serves – Minnesota, Wisconsin, North Dakota, South Dakota, and Michigan.
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Tesla has announced that it will finally deliver 500 kW charging as it is about to install its long-awaited V4 Supercharger cabinets.
The rollout of Supercharger V4 has been a strange one, to say the least.
Tesla has been deploying the new charging stations for two years and calling them “Supercharger V4”, but it has only been deploying the charging stalls.
Supercharger stations are made of two main parts: the stalls, which are where the charging cable is located, and the cabinets, which are generally located further back and include all the power electronics.
For all these new “Supercharger V4”, Tesla was actually using Supercharger V3 cabinets. This has been limiting the power output of the charging stations to 250 kW – although
Today, Tesla officially announced its “V4 Cabinet”, which the automaker claims will enable of “delivering up to 500kW for cars and 1.2MW for Semi.”
Here are the main features of the V4 Cabinet as per Tesla:
- Faster charging: Supports 400V-1000V vehicle architectures, including 30% faster charging for Cybertruck. S3XY vehicles enjoy 250kW charge rates they already experience on V3 Cabinet — charging up to 200 miles in 15 minutes.
- Faster deployments: V4 Cabinet powers 8 posts, 2X the stalls per cabinet. Lower footprint and complexity = more sites coming online faster.
- Next-generation hardware: Cutting-edge power electronics designed to be the most reliable on the planet, with 3X power density enabling higher throughput with lower costs.
Tesla reports that its first sites with the new V4 Cabinets are going into permitting now. The company expects its first sites to open next year.
We recently reported about Tesla’s new Oasis Supercharger project, which includes larger solar arrays and battery packs to operate the charging station mostly off-grid.
Early in the deployment of the Supercharger network, Tesla promised to add solar arrays and batteries to all Supercharger stations, and Musk even said that most stations would be able to operate off-grid.
While Tesla did add solar and batteries to a few stations, the vast majority of them don’t have their own power system or have only minimal solar canopies.
Back in 2016, I asked Musk about this, and he said that it would now happen as Tesla had the “pieces now in place” with Supercharger V3, Powerpack V2, and SolarCity:
It took about 8 years, but it sounds like the pieces are now getting actually in place with Supercharger V4, Megapacks, and this new Oasis project.
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Hyundai has a new secret weapon it’s about ready to unleash. To revamp the brand in China and counter BYD’s surge, Hyundai is launching a new AI-powered EV next year. The new model will be Hyundai’s first dedicated electric car for the world’s largest EV market.
With the help of Haomo, a Chinese autonomous startup, Hyundai will launch its first EV equipped with generative AI. It will also be its first model designed specifically for China.
A Hyundai Motor official said (via The Korea Herald) the company is “working to load the software” onto the new EV model, “which will be released in the Chinese market next year.” The spokesperson added, “The level of autonomous driving is somewhere between 2 and 2.5.”
In comparison, Tesla’s Autopilot is considered a level 2 advanced driver assistance system (ADAS) on the SAE scale (0 to 5), meaning it offers limited hands-free features.
With Autopilot, you still have to keep your eyes on the road and hands on the steering wheel, or the system will notify you and eventually disengage.
Haomo’s system, DriveGPT, unveiled last spring, takes inspiration from the OpenAI’s popular ChatGPT.
The system can continuously update in real-time to optimize decision-making by absorbing traffic data patterns. According to Haomo, DriveGPT is used in around 20 models as it looks to play a bigger role in China.
Hyundai hopes new AI-powered EV boosts sales in China
Electric vehicle sales continue surging in China. According to Rho Motion, China set another EV sales record last month with 1.2 million units sold, up 50% from October 2023.
Over 8.4 million EVs were sold in China in the first ten months of 2024, a notable 38% increase from last year.
BYD continues to dominate its home market. According to Autovista24, BYD accounted for 32.9% of all PHEV and EV (NEV) sales in China through September, with over half of the top 20 best-selling EV models.
Tesla was second with a 6.5% share of the market, but keep in mind these numbers only include plug-in models (PHEV).
Like most foreign automakers, Hyundai is struggling to keep up with the influx of low-cost electric models in China. Beijing Hyundai’s sales have been slipping since 2017. Through September, Korean automaker’s share of the Chinese market fell to just 1.2%.
Last month, Hyundai opened its first overseas digital R&D center in China to help kick off its return to the region.
According to local reports, Hyundai is partnering with other local tech companies like Thundersoft, a smart cockpit provider, and others in China to power up its next-gen EVs
With its first AI-powered EV launching next year, Hyundai hopes to turn things around in the region quickly. The new model will be one of five to launch in China through 2026.
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