Bidenomics is working.
After complaints from consumers and pressure on retailers from the Biden administration, U.S. consumer prices fell for the first time in four years last month, two years after they hit an all-time high.
Consumer prices peaked at 9.1% in June 2022.
Now, Americans are seeing cheaper gasoline prices and lowered rents, an indicator that the Federal Reserve could be another step closer to cutting interest rates in September.
Reuters reported on Thursday that the consumer price index (CPI) dipped by a slight 0.1% last month. But it was the first drop since May 2020, the Labor Department's Bureau of Labor Statistics said.
"The CPI was weighed down by a 3.8% decline in gasoline prices, which followed a 3.6% decrease in May. Shelter costs, which include rents, increased a moderate 0.2% after advancing 0.4% in May," according to the report.
The report shows that while grocery store prices inched up by 0.1%, increases in the cost of dairy products, meat, fish, and eggs were offset by declines in the costs of fruits and vegetables as well as cereals.
Consumers also got relief from healthcare costs, which rose 0.2% after advancing 0.5% in May. Airline prices were cheaper, as were used cars and trucks, new motor vehicles, and communication services.
A separate report from the Labor Department on Thursday showed initial claims for state unemployment benefits fell 17,000 to a seasonally adjusted 222,000 for the week ended July 6, the lowest level since late May.
Fed Chair Jerome Powell acknowledged the improving trend, and told lawmakers that "more good data" would strengthen the case for rate cuts.