According to a Commerce Department report Friday that is closely watched by the Federal Reserve, consumer prices rose 6.3% in July from a year earlier after posting an annual increase of 6.8% in June.
The number of Americans collecting traditional unemployment benefits fell by 19,000 the week that ended Aug. 13, to 1.42 million.
In its previous estimate for the April-June quarter, the government had estimated that the economy had shrunk at a 0.9% rate.
The plan, expected to be revaled Wednesday, would likely eliminate student debt entirely for millions of Americans and wipe away at least half for millions more.
Consumers remained wary of spending much on non-essentials: Sales were down 0.5% at department stores and 0.6% at clothing stores.
The percentage of small-business owners citing an increasingly uncertain economic outlook rose sharply in July, while overall optimism remains near historic lows, according to data released last week by the National Federation of Independent Business.
The legislation, which is headed for final approval Friday in the House and will then be signed into law, won’t directly address some of the main drivers of surging prices—from gas and food to rents and restaurant meals.
Inflation at the wholesale level still jumped 9.8% in July compared with a year earlier, suggesting that inflation will remain at painful levels for months to come.
Wednesday’s report raised hopes that a modest slowdown in inflation might enable the Federal Reserve to raise short-term interest rates by less than had been anticipated when it meets in late September.
Thanks largely to falling gas prices, the government’s inflation report for July, to be released Wednesday morning, is expected to show a small slowdown from the 9.1% year-over-year figure in June, which was the highest in four decades.
The surprisingly strong jobs numbers will undoubtedly intensify the debate over whether the U.S. is in a recession or not.
An inflation gauge closely tracked by the Fed jumped 6.8% in June from a year ago, the government said Friday, the biggest such jump in four decades. Much of the increase was driven by energy and food.
Businesses have already noticed changes in consumer behavior as inflation erodes workers’ discretionary incomes.
The decline that the Commerce Department reported Thursday in the gross domestic product—the broadest gauge of the economy—followed a 1.6% annual drop from January through March.
The Fed is tightening credit even while the economy has begun to slow, thereby heightening the risk that its rate hikes will cause a recession later this year or next.
Unilever, which owns 400 consumer brands ranging from Ben & Jerry’s ice cream to Dove skin care, raised prices by more than 11% between April and June as inflation surged around the world.
The Conference Board said Tuesday that its consumer confidence index fell largely due to consumer anxiety over the current economic conditions, particularly four-decade high inflation.
Treasury Secretary Janet Yellen spoke just before a slew of economic reports will be released this week that will shed light on an economy currently besieged by rampant inflation and threatened by higher interest rates.
The government also reported earlier in July that U.S. employers advertised fewer jobs in May amid signs that the economy is weakening, though the overall demand for workers remained strong.
While people taking on multiple jobs is typically a sign of a healthy job market where workers have more job opportunities available, it is also a sign of increasing financial strain on Americans’ pocketbooks.
