Inflation in the United States seems on the way to becoming an old story while the increase in the rates of the American Federal Reserve (Fed, central bank), which have risen from zero to more than 5.25% in eighteen months, should end. Indeed, the consumer price index for July increased by 3.2% over one year, according to statistics published Thursday, August 10. A figure up slightly from the 3% posted in June, but which remains below expectations.
Above all, the interest lies elsewhere: from one month to the next, inflation rose by only 0.2% (around 2.4% at an annual rate), whether overall index or that excluding energy and food. The phenomenon has lasted for two months, which suggests that the rise in prices is close to the objective of 2% at an annual rate pursued by the Fed.
Most of this increase is due to housing, with rents taking a long time to fall despite the rise in interest rates which shattered the real estate market. As for the prices of services, which had skyrocketed, they are calming down; thus, those of plane tickets, which had become prohibitive, fell by 18.6% over one year and 8.1% over one month.
The US economy added 187,000 jobs in July
This landing is done while the labor market is calming down a bit. The country is certainly experiencing full employment – with an unemployment rate of 3.5% of the active population and an increase in labor participation – wages have increased over one year by 4.4%, a figure that is too high. for the Fed, but the US economy created “only” 187,000 jobs in July, a sign of a drop in overheating.
Everything is fine ? So how to explain that the rating agency Fitch has degraded the AAA rating of the United States, twelve years after that decided by Standard and Poor’s in the wake of the great financial crisis. Unfair, shouted the Americans, as an armistice was signed between Democrats and Republicans on this subject until the election.
“It’s completely absurd. And it’s more likely to show that Fitch is irrelevant to investors. [en ce qui concerne l’évaluation de] US sovereign debt than to show [à ces derniers] anything about the United States”, was indignant Jason Furman, an economist at Harvard. His colleague Olivier Blanchard had another look: “More than the level of debt or even debt service, what matters most for debt sustainability is whether the budget process is functional or not, whether it can adjust if the need arises. in fact feel. The US budget process is dysfunctional. Fitch’s downgrade was reasonable. » In short, it is not because one gets used to the psychodramas of Washington that this attitude is acceptable.
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