Overall U.S. inflation declined in July, driven in large part by a drop in gas prices, but the costs of basic necessities continue to rise at rates not seen for decades.

The U.S. Labor Department’s Consumer Price Index report for July shows prices on consumer goods and services rose an average 8.5% in the month, down from June’s 9.1% clip and a rate tempered by a 7.7% decline in gas prices.

Grocery prices were up 13.1% in July, the biggest year-over-year jump since 1979 according to the report. The cost of shelter, medical care, car insurance, new vehicles and recreation all rose in July as well.

While gas and energy prices were down in July, after hitting all-time record highs in June, the cost of gas is still up 44% over a year ago and overall energy costs are up 33% from the same time in 2021.

Utah is among Mountain West states that continue to see some of the highest regional inflation in the country. July inflation for the area hit 9.6%, down from June’s 9.9%.

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Fed levies another jumbo interest rate hike in ongoing fight against record inflation

An unexpectedly robust jobs report earlier this month showed the nation finally recovered the 22 million jobs lost amid pandemic conditions as employers added 528,000 positions in July and annual wage growth was north of 5%. But, those bigger paychecks are still falling well short of inflation-driven price increases and some reports show over 150 million Americans are struggling to keep up and living paycheck to paycheck.

The surprisingly robust employment numbers, along with the July inflation numbers, are likely to incite the Federal Reserve to continue its streak of hefty benchmark interest rate hikes as the monetary body struggles to strategically tamp down the economy and quell inflation.

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Fed Chairman Jerome Powell has said the Fed needs to see a series of declining monthly core inflation readings before it would consider pausing its rate hikes. The Fed has raised its benchmark short-term rate at its past four rate-setting meetings, including a three-quarter point hike in both June and July — the first increases that large since 1994.

The U.S. is not alone in navigating the challenges posed by record inflation.

In the U.K., inflation soared 9.4% in June from a year earlier, a four-decade high. In the 19 countries that use the euro currency, it reached 8.9% in June compared with a year earlier, the highest since record-keeping for the euro began.

Contributing: Associated Press

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