(Bloomberg) -- President Joe Biden celebrated a monthly drop in consumer prices, a potential political tailwind for him, even as Federal Reserve Chair Jerome Powell warned against putting too much confidence in a single month’s data.
The US personal consumption expenditures price index, which the central bank uses for its inflation target, fell 0.1% in July from a month earlier, the first negative reading since the start of the pandemic, Commerce Department data showed Friday. The same report also showed personal income rising, though consumer spending was slower than economists expected.
“The American people are starting to get some relief from high prices,” Biden said in a statement.
Read more: US Spending Posts Weak Gain Even as Fed Inflation Gauge Eases
Biden has been moving to try to ease inflation, and has touted a steady drop in gasoline prices throughout the summer. He also signed the Inflation Reduction Act, which aims to modestly ease price pressures in the medium and long term.
Powell nodded to July’s inflation data, with a separate report earlier this month showing prices unchanged from June -- still highly elevated from a year prior, but potentially peaking.
“A single month’s improvement falls far short of what the committee will need to see before we are confident inflation is moving down,” Powell said Friday in Jackson Hole, Wyoming. “While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation.”
©2022 Bloomberg L.P.