The Pulse August 14, 2024

1. Consumer Price Index (CPI) for July 2024:some text
   • Inflation Trends: The CPI increased by 0.2% in July after a 0.1% decline in June. This brought the annual inflation rate to 2.9%, down from the previous months, reflecting a continuing moderation in price increases. Core inflation, which excludes volatile food and energy prices, also showed a 0.2% increase in July, resulting in a 3.2% rise over the past year​ (BLS.gov).
   • Sector-Specific Changes: Energy prices were flat in July, with gasoline prices remaining unchanged after significant declines in previous months. Food prices edged up by 0.2%, driven by a notable 0.7% increase in the index for meats, poultry, fish, and eggs, particularly a 5.5% jump in egg prices. On the other hand, used car prices continued to decline, falling by 2.3% in July, contributing to a 10.9% year-over-year decrease​(BLS.gov).

Indian Economic Developments

2. Merchandise Trade Deficit:some text
   • Widening Trade Deficit: India's merchandise trade deficit widened to $23.5 billion in July 2024, compared to $20.98 billion in June. This increase was mainly due to a drop in exports, which fell from $35.2 billion in June to $33.98 billion in July, while imports rose to $57.48 billion in July from $56.18 billion the previous month​ (mint).
   • Impact on Economy: The widening deficit indicates challenges in India's export sectors, possibly due to global demand fluctuations or domestic supply issues. The increase in imports may reflect stronger domestic demand or higher costs for essential goods like oil.
3. Wholesale Inflation:some text
   • Decline in Wholesale Prices: India's wholesale inflation dropped to 2.04% in July 2024, down from 3.36% in June. This marks the lowest level of wholesale inflation in three months, primarily due to a reduction in food prices. This cooling of wholesale prices could eventually translate into lower consumer prices, easing the inflationary pressures on the broader economy​ (mint).

These updates provide a comprehensive view of the economic conditions in both the U.S. and India as of mid-August 2024, highlighting key areas of concern such as inflation trends, trade deficits, and sector-specific changes in prices.