Inflation eases in July, but these cities are worst hit: study

Inflation fell to its lowest level in more than three years in July, a welcome sign for the The US Federal Reserve although prices remained uncomfortably high for millions of Americans.

To determine how Inflation affects people WalletHub released an updated report on Wednesday comparing 23 major metropolitan areas based on two key metrics related to the Consumer Price Index (CPI), which measures inflation.

The private finance company compared last month's consumer price index with different periods to get an overview of the short-term and long-term change in inflation in the cities studied.

“The current inflation rate provides insight into current economic challenges and possible future trends. Persistently high inflation rates suggest that supply chain disruptions, labor market imbalances and energy price volatility are significant problems that may take time to resolve,” Doron Narotzki, an associate professor at the University of Akron, said in a statement. “However, if inflation begins to stabilize and decline, it could be a sign that the economy is adjusting and that the measures taken to control inflation are effective.”

Cities with the biggest inflation problems

1. New York-Newark-Jersey City, New York, New Jersey
2. Minneapolis-St. Paul Bloomington, Minnesota, Wisconsin
3. Detroit-Warren-Dearborn, Michigan
4. Chicago-Naperville-Elgin, Illinois
5. Urban Honolulu, Hawaii
6. St. Louis, Missouri
7. Seattle-Tacoma-Bellevue, Washington
8. San Diego-Carlsbad, California
9. Philadelphia-Camden-Wilmington, Pennsylvania, Maryland, Delaware
10. Washington–Arlington–Alexandria, DC–VA–MD–WV
11. Atlanta-Sandy Springs-Roswell, Georgia
12. Baltimore-Columbia-Towson, Massachusetts
13. Los Angeles-Long Beach-Anaheim, California
14. Dallas-Fort Worth-Arlington, Texas
15. Phoenix-Mesa-Scottsdale, Arizona

Check out the full list here.

Inflation falls in July

On Wednesday, the Labor Department announced that the consumer price index (CPI) rose 0.2 percent in July compared to the previous month, which was in line with expectations.

Prices rose 2.9% compared to the same period last year, beating the 3% increase forecast by LSEG economists. This was the lowest inflation rate since March 2021.

RELATED: Inflation rises by 2.9% in July, less than expected

Another data point that measures underlying inflationary pressures within the economy also eased last month. So-called core prices, which exclude the more volatile values ​​for gasoline and food to better gauge price growth trends, also rose 0.2 percent in July. Compared to the same period last year, the indicator rose 3.2 percent. Both values ​​are in line with expectations.

Overall, the report suggests that inflation is loosening its stranglehold on the U.S. economy, even though prices are still above the Fed's two percent target.

“Inflation is calmer, which is leading the Fed to begin cutting rates in September,” said Lawrence Yun, chief economist at the National Association of Realtors, in a statement. “The Fed has indicated that it needs to normalize and move away from its current 'tight' monetary policy. It has also indicated that it is willing to cut rates if inflation approaches 2%, rather than waiting until 2% is reached.”