Inflation stayed at 2.7% last month
The inflation rate was 2.7% for the 12 months ending in July, the U.S. Bureau of Labor Statistics reported Tuesday. That’s the same annual increase in prices the bureau reported for the previous month.
Tuesday’s report, coupled with last week’s negative report about job growth, muddies the waters somewhat for the Federal Reserve as it considers an interest rate cut in September. Excluding food and energy, the rate was up 3.1%, which may indicate tariffs are creating an upward effect on prices. While the job numbers might push the Fed to cut a key rate, it’s also been reluctant to do so amid concerns over tariff-driven price increases.
“While certain goods are clearly seeing tariff-induced price increases, consumers aren't feeling the pinch in a large way yet, and their budgets are getting relief from lower gas prices,” Navy Federal Credit Union chief economist Heather Long said in a statement. “Still, core inflation is now back at 3.1%, and many companies have announced plans to pass along higher costs to their customers soon.”
While food prices were up 2.9% over the past year, energy costs, including gasoline, fell 1.6%, according to the bureau’s data. Certain sectors that could be vulnerable to tariffs saw price hikes, including household furnishings.
Gen Zers and millennials more focused on refinancing
Younger Americans are much more likely than Baby Boomers to buy houses with the assumption they’ll be able to refinance to a lower mortgage rate later, according to a report Tuesday by income and employment verification firm Truework.
The company surveyed 1,000 people who bought homes in the past two years. Nearly two-thirds of Gen Z and millennial buyers born in the 1980s or later said refinancing in the next three years was important or extremely important to them. Only 32% of recent Baby Boomer buyers said the same.
It’s worrisome that so many younger buyers are banking on substantial rate reductions, the report said, given they may not materialize in the next couple of years. Also, eligibility for refinancing depends on one’s employment status, income level and credit score. In addition, closing costs can take a hefty bite out of the savings buyers achieve from a lower rate.
Most financial advisers "say that refinancing only makes sense if you can decrease your mortgage rate by at least 1% due to the thousands of dollars in closing costs — something that most may not realize,” according to the report.
