All of a sudden, good news about the economy. Let’s not get ahead of ourselves, but there are some positive signs about things.
Let’s start with gas prices. AAA is reporting that the national average is $3.99 a gallon. That’s the first time it has been below $4 since March. A welcome relief.
Still, AAA reports that fewer of us filled up our tanks last week. That’s an indication that we are changing our driving habits.
What’s going on? The price of oil is down.
Another sign that things may be getting better… the inflation rate. It appears to be cooling off. The Consumer Price Index climbed 8.5 percent in the year through July. While that sounds like a lot… it’s less than the 9.1 percent from the month before.
President Biden is celebrating the news. “This is what happens when you build an economy from the bottom up in the middle out.”
Economist Paul Krugman writes in the New York Times that Democrats should emphasize the good news. As for policymakers, he says “keep calm and carry on.”
Krugman writes, “Time and time again, the Fed has steered through crises by ignoring critics who wanted it to panic over blips in inflation caused by temporary jumps in commodity prices.”
So, why is inflation coming down? Krugman believes there’s a global economic slowdown happening. “America probably isn’t in a recession, but Europe probably is.” He also says China is “hobbled” by its zero-Covid policy.
What’s the takeaway from all this? The markets are loving the news. The Dow was up 535.
The Federal Reserve gets wiggle room. Maybe it will not have to raise interest rates when it meets again. At least, maybe, not so much.
Don’t get me wrong here. Things are still too high. Grocery prices are too much.
At least though, we’ve had some good news about the economy. Finally, the right direction.