Weekend Edition.

Above and beyond the call of duty.

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1. Despite inflation cooling to the lowest level in more than three years in July, there's no way around the fact that consumer prices in the United States have risen sharply over the past three years…..Since February 2020, the last month before the Covid-19 pandemic disrupted the global economy, the Consumer Price Index for All Urban Consumers (CPI-U) has increased 20.9 percent. Assuming the Fed’s targeted 2-percent inflation rate, prices would only have increased by 9.1 percent during that period, illustrating how severe the recent inflation surge has been. More importantly though, prices are going to remain elevated even if inflation returns to its target level of 2 percent, meaning that the effects of the inflation crisis will linger. Not all prices are created equal, however, and while some expenditure categories have seen prices rise even more steeply than 20.9 percent since February 2020, others have barely budged. (Source: statista.com)

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2. Chart:

(Source: statista.com)

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3. US consumer sentiment rose in early August for the first time in five months on more optimistic expectations about their finances as inflation steadied. The sentiment index climbed to 67.8 from 66.4 in July, according to the preliminary August reading from the University of Michigan. The median estimate in a Bloomberg survey of economists called for 66.9. Consumers expect prices will climb at an annual rate of 2.9% over the next year, unchanged from the prior month, data Friday showed. They see costs rising 3% over the next five to 10 years. The rise in sentiment was partially driven by President Joe Biden’s decision not to seek re-election, which he announced later in July. Confidence rebounded among Democrats after Vice President Kamala Harris stepped in as the party nominee. (Sources: bloomberg.com, sca.isr.umich.edu)

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4. AP/NORC Poll:

When it comes to comparing the candidates on the issues, the public is more likely to trust Trump to do a better job handling the economy and immigration.  Harris is more trusted to handle racial inequality, abortion, and heath care. The public is closely divided on which candidate would do a better job of handling crime or the wars in Gaza and Ukraine. (Source: apnorc.org)

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