Thursday, 3 April 2025
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US Inflation Cools in September, Signaling Strong Economy

  • Inflation likely dropped to 2.3% in September, the lowest since February 2021.
  • Lower gas prices and mild food cost increases helped moderate inflation.
  • Positive economic growth and job gains could influence voter sentiment ahead of the election.

Inflation in the U.S. is expected to have cooled to 2.3% in September, marking a significant reduction from its peak of 9.1% two years ago.

Lower gas prices and modest increases in food costs are likely responsible for this downward trend, bringing inflation close to the Federal Reserve’s 2% target. Month-over-month, consumer prices are thought to have risen by only 0.1%, reflecting a continued easing of price pressures.

Lower Inflation Strengthens U.S. Economy, Impacting Election Landscape

This moderation in inflation comes alongside other encouraging economic indicators, including a drop in the unemployment rate and steady job creation. The U.S. economy expanded at a solid annual rate of 3% in the second quarter, and similar growth is anticipated for the third quarter. These positive trends could impact the presidential race, where economic performance remains a key issue for voters.

The economic data reveals a more optimistic outlook for the U.S. economy, bolstered by a robust job market and continued GDP growth. In addition to cooling inflation, the unemployment rate dropped to 4.1% in September, reflecting strong hiring and consumer spending. The economy expanded at a 3% annual rate in the second quarter and is projected to maintain that momentum in the third quarter.

This cooling inflation could play a significant role in reshaping voter perceptions as the presidential election approaches. Former President Donald Trump had held a strong lead over President Joe Biden regarding economic management in public opinion polls. However, recent surveys suggest Vice President Kamala Harris is closing the gap on this issue, thanks to the improving economic conditions.

Despite these positive indicators, many Americans still express concern about the higher prices they’ve experienced over the last three years. While inflation may be cooling, the cumulative effect of price hikes in previous years remains a key challenge for households and may influence voters’ economic outlook in the coming months.

With inflation moderating and economic growth holding steady, the U.S. economy is showing signs of resilience. However, voters’ long-term concerns about price increases will likely continue to shape the political landscape as the election nears.

“Inflation is taxation without legislation.” — Milton Friedman

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