US inflation falls to lowest level in three years

High prices have become a central issue in the 2024 presidential election. Former US President Donald Trump, who is running as the Republican presidential candidate, blames the administration of Joe Biden and Kamala Harris.

Data released on Wednesday showed that inflation in the US fell to its lowest level in three years in July, making a rate cut by the US Federal Reserve likely next month.

Data from the U.S. Bureau of Labor Statistics showed that annual inflation reached 2.9 percent in July, falling below three percent for the first time since March 2021.

Inflation rose to a 40-year high of 8.6 percent in June 2022, triggering a series of interest rate hikes by the Federal Reserve to cut spending and cool the economy. The Federal Reserve is widely expected to announce a rate cut next month amid signs of recovery.

“We still have more to do to reduce costs for hardworking Americans, but we are making real progress: wages have risen faster than prices for 17 consecutive months,” said US President Joe Biden.

He added: “Prices are still too high. Big corporations are sitting on record profits and not doing enough to bring prices down. That's why we're fighting the pharmaceutical industry to bring down prescription drug prices. We're cutting red tape to build more housing while cracking down on corporate landlords who unfairly raise rents. And we're cracking down on price gouging and junk fees to bring down everyday costs from groceries to air travel.”

High prices have become a central issue in the 2024 presidential election, with former US President and Republican presidential candidate Donald Trump blaming the administration of Joe Biden and Kamala Harris.

He has made “ending inflation” one of his key re-election promises. Democratic presidential candidate Kamala Harris has acknowledged that prices are still high, and like US President Joe Biden, she is trying to shift some of the blame onto businesses.

However, she is expected to set out her arguments in more detail when she announces her economic policy later this week.