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Inflation Slows Down

GASOLINE FALLS BELOW 4 DOLLARS

New York / Agencia Efe

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The price for a gallon of gasoline (3.78 liters) in the United States fell below $4 for the first time since March. This is a sign that inflationary pressures for consumers are easing. According to the federation of automobile associations AAA, the average price of a gallon of fuel at the country’s gas stations was $3.99.

This is 81 cents higher than a year ago. However, that price is down from the mid-June peak of $5.02. The national average includes a wide range of prices, from nearly $5 a gallon in Oregon and Nevada to around $3.50 in Texas and Oklahoma. Experts say the drop is the result of weaker demand.

The causes

High fuel costs have kept some drivers off the roads. At the same time, a drop in global oil prices has been observed in recent months. Additionally, some twenty states of the American union temporarily suspended their tax on gasoline. Higher energy costs have been the main factor driving inflation, the highest in 40 years.

The Bureau of Labor Statistics (BLS) announced that US inflation took a breather in July by placing its year-on-year rate at 8.5 percent. This figure means about 6 tenths less than in June. Compared to the previous month, consumer prices remained stable (0 percent) thanks mainly to the drop in gasoline prices, which was 7.7 percent in July.

The consequence

However, high inflation continues to be the main concern of the Federal Reserve (Fed). On July 27, interest rates were raised again, which are now in a range of between 2.25 and 2.5 percent. The central bank is scheduled to raise interest rates again at its September meeting.