- **Goods inflation** was a major contributor to the rise in the CPI back in 2021 but has been a negative contributor since July 2023.

So far this year, core goods prices have decreased by **0.

9%**.

- **Food inflation** was **0.

2% in July** and has also eased substantially from its peak.

This is particularly the case for grocery prices, which ticked up by **0.

1% in July** and **1.

1% over the past year**.

Persistent cooling in grocery inflation marks the continuation of a welcome trend.

The three-month annualized percent change in grocery prices has remained below headline CPI inflation since March 2023.

Restaurant prices have been considerably stickier, up by **4.

1% on a yearly basis**.

Even that rate, however, is less than half of the **8.

8% inflation rate for restaurants in March of last year**.

- The price of **energy**, especially retail gas, has been another important source of disinflation, or in this case, deflation.

Over the past year, the gas price included in the CPI is down by **2.

2%**.

Data from AAA show that over the past year, the average price for a gallon of gas fell from **$3.

85 to $3.

44** as of August 13th, or **$0.

41 less per gallon**.

Note that over this same period, the average hourly wage for middle-wage workers went up (in nominal terms) from **$29.

03 to $30.

14**, or **$1.

09**.

In other words, an hour of work today buys more gas than it did a year ago due to the combination of both rising pay and falling gas prices.

- Movements in **housing prices** have contributed less to inflation’s round-trip than the above categories, though they have helped.

At its peak in February 2023, housing added **2.

8 percentage points** to three-month headline CPI inflation.

By December 2023, this contribution was a full percentage point lower.

After an uptick in the first quarter of this year, housing’s contribution to three-month annualized headline inflation has declined each month from April through July, and July saw the lowest contribution since October 2021.

While inflation’s continued descent from its round-trip is obviously a positive development, it is not always apparent what all these numbers mean to households trying to make ends meet.

As a concrete example of how these dynamics help in that endeavor, it is useful to turn back to grocery prices and also, as we did with retail gas above, add in the benefits of rising pay.

The figure below shows the number of hours of work it takes for the average, middle-wage worker to afford a week’s worth of groceries.

Together, rising wages and falling grocery inflation have restored purchasing power for grocery shoppers to pre-pandemic levels.

That is, it takes this worker the same amount of work to buy a bag of groceries as it did before the pandemic took hold and inflation took flight.

More broadly, as this last figure shows, yearly hourly wage growth has been outpacing price growth for 15 months, and for 17 months among middle-wage workers.

None of these favorable trends mean our work is over.

Too many families still face prices that are too high, and we will continue our aggressive agenda to lower the costs of healthcare, prescription drugs, housing, childcare, and many other sources of stress to family budgets.

But the combination of easing inflation as it continues on its round-trip, along with rising pay, is helping to lift families’ buying power, and we plan to continue to build on that progress.

We'll be in touch with the latest information on how President Biden and his administration are working for the American people, as well as ways you can get involved and help our country build back better.