By Jamison Hixenbaugh
ERIE, Pa. (Erie News Now) – After months of soaring prices, inflation eased off of historically high levels in July.
According to the most recent Consumer Price Index numbers, overall inflation dropped from a 40-year high of 9.1 percent in June, to 8.5 percent in July.
A driving force behind the dip is decreasing gas prices.
Gasoline prices fell 7.7 percent in July, but are still up by 44.9 percent compared to last year.
“Things are moving in the right direction,” said Penn State Behrend economics professor Dr. Kenneth Louie. “But compared to recent historical standards, inflation is still on the high side.”
As of today, the average price of gasoline in Pennsylvania is $4.24 a gallon.
While gas prices have dropped, food prices have increased by 1.3 percent.
You’re now paying 13.1 percent more on all food items compared to last year, which is the largest increase since 1979.
“These are items that middle class families often struggle to pay for,” said Dr. Louie. “The more moderation we see in prices in those categories, housing, energy, and gasoline, the more it will help.”
As for an end in sight, Dr. Louie says it’s too early to tell.
“I think one month’s worth of data is probably not enough,” said Dr. Louie. “There are many, many more pieces of data that we need to look at in the next few months, especially what the Federal Reserve’s response will be to that incoming data. That will give us a better indication of the likelihood of a recession.”
This story is supported by the Economic Hardship Reporting Project.