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One Chart That Shows Inflation Really Was 0% in July

Jerome Powell, chairman of the Federal Reserve, speaks during a news conference on July 27, 2022.

Jerome Powell, chairman of the Federal Reserve, speaks during a news conference on July 27, 2022.

Photographer: Ting Shen/Bloomberg

Markets surged yesterday after we got a 0.0% reading on month-over-month headline CPI. This was below the 0.2% that was expected, and well below the 1.3% number that we saw in the previous month. Of course, headline inflation was heavily influenced by the recent plunge in gasoline prices. However, core inflation — which excludes food and energy—  also came in well below expectations (0.3% sequentially versus the 0.5% median estimate of economists).

There are many ways people look at the inflation data, and it’s pretty common to look at the year-over-year number as well. And the year-over-year headline number was 8.5%, down from 9.1% in the previous month.