Inflation Stalls at High 3% Rate, Offset by Housing and Car Costs, Squeezing Budgets

Inflation peaked at 9% in June 2022 but has stalled at 3.1% the last 3 months, dashing hopes it would drop below 3% and indicating it is not receding as quickly as expected.

Persistently high housing and rent costs along with a surprise spike in car insurance have offset lower prices elsewhere.

Biden needs inflation to drop further to boost his approval rating and reelection odds, which remain around 50-50.

Consumers are still paying higher prices for staples like food and gas compared to 2-3 years ago, squeezing budgets.

Weakening retail sales could moderate prices if demand stays low, but no sign yet consumer spending will collapse and cause a recession.