Inflation in July points to interest rate cuts

RAPID CITY, SD (KOTA) – The Consumer Price Index for July 2024 was released on August 14. It shows inflation at 2.9 percent, the lowest rate since March 2021.

“So while the rest of the country is saying 'great, we're under three,' the Midwest and Rapid City have been under three for two or three months. Our inflation rate is probably closer to 2.7-2.5, so we're even lower than the rest of the country,” said Tom Johnson, CEO and president of Elevate Rapid City.

Johnson estimates that wages in Rapid City have increased by 10 percent. But that doesn't mean the economy will recover overnight. Interest rates and average home prices are still high.

“So it's probably still a little bit too high for what we want to do to make sure that people who are just entering the workforce can afford a house or people who are renting can pay rent. So we still want to say that houses are too expensive right now and we'd like to see that come down a little bit, but it's starting to stabilize. So that's a good thing,” Johnson said.

Economists on Wall Street are predicting an imminent interest rate cut, the first cut since 2020.

Currently, Rapid City is showing signs of a healthy economy.

“I would say that Rapid City’s economy is still very good compared to the rest of the world. [country]”We're still seeing healthy growth, our population is still growing, our wages are rising, our unemployment is still very low. So overall, this is a good thing for Rapid City,” Johnson said.

Members of the Federal Policy Committee said they would wait until inflation stabilizes at 2 percent annually before changing interest rates. The July consumer price index is evidence that the economy is moving in the right direction.

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