An 11% drop in gasoline prices in July has been able to restrict the rise in the Consumer Price Index (CPI) to 8.5% versus the 40-year high of 9.1% in June. In June, workers saw a 0.5% monthly increase in real wages, and the job market witnessed a solid improvement.
Moreover, according to a New York Federal Reserve survey, consumers’ one- and three-year-ahead inflation expectations dropped sharply in July to 6.2% and 3.2% from 6.8% and 3.6% in June, respectively. With easing inflationary pressures, an improved job market, and an increase in real wages, consumer spending is expected to rebound in the upcoming months.
