On Wednesday, officials reported that the Consumer Price Index (CPI) rose 5.4% in July. They said the CPI increase 0.5% on a month-over-month basis. While the price for everyday items is increasing, experts say it’s at a slower pace. In other news, early Wednesday, the Senate approved a budget resolution, the first step toward Democrats passing a $3.5 trillion spending plan without Republican votes. The measure directs committees to craft a bill that would spend trillions on climate initiatives, paid leave, child care, education, and health care. The vote for the resolution follows Senate passage of a $1 trillion bipartisan infrastructure bill on Tuesday. Committees have until Sept. 15 to finish writing their portions of the final legislation.


CNN Business/Anneken Tappe
Inflation moderated in July but prices are still rising in America

Higher prices have been the pandemic recovery’s collateral damage. Even though higher Washington insists higher inflation may just be temporary, America’s prices keep rising — albeit at a slightly slower pace.

In July, the pace of consumer price inflation slowed some, but it still remained elevated, the Bureau of Labor Statistics reported Wednesday.

Stripping out more volatile food and energy items, consumer prices rose 4.3% in the 12 months ended in July, slightly below the June’s rise. Overall, prices rose 5.4% over the period, flat compared with June.

For the month alone, adjusted for seasonal swings, prices rose 0.5% on the whole and 0.3% stripping out food and energy items, representing a slowdown on both fronts. Price increases for shelter, food, energy and new cars were the major contributors to the index’s jump.

But the pace of the gains slowed, and the major driver of that was the price index for used cars, which was nearly unchanged.

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CNBC/Jacob Pramuk
Senate approves framework of $3.5 trillion budget plan that would expand Medicare, tax credits and climate initiatives

Senate Democrats took their first step toward passing a $3.5 trillion spending plan early Wednesday as the party forges ahead with a massive economic agenda.

After more than 14 hours of votes on amendments, the Democratic-held chamber voted to pass a budget resolution 50-49 along party lines. The measure directs committees to craft a bill that would spend up to $3.5 trillion on climate initiatives, paid leave, child care, education and health care.

“The Democratic budget will bring a generational transformation to how our economy works for average Americans,” Schumer said after its passage.

It marks the first step in the budget reconciliation process, which will allow Democrats to approve their plan without a Republican vote in the Senate split 50-50 by party. The GOP has united against the proposal and the tax increases on corporations and wealthy individuals that Democrats plan to use to pay for it.

The vote for the resolution follows Senate passage of a $1 trillion bipartisan infrastructure bill Tuesday. Democrats see the bipartisan plan and their reconciliation bill as complementary planks of an agenda that aims to create jobs, slow climate change and strengthen the social safety net.

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Kitco News/Neils Christensen
Gold price rises as inflation looks to have peaked

The gold market is holding on to gains near session highs as inflation pressures look to have peaked, meeting economist expectations.

Wednesday The U.S. Labor Department said its U.S. Consumer Price Index rose 0.5% in July, after a 0.9% rise in June. The data was in line with consensus forecasts. For the year, the report said that headline inflation rose 5.4%.

Meanwhile, core CPI, which strips out food and energy costs, increased 0.3% last month, down from June’s 0.9% increase. The rise in inflation was weaker than expected. Economists were expecting to see an increase of 0.4%. For the year, core CPI is up 4.3%, the report said.

At first blush the weaker price pressure should be negative for gold, which is seen as an inflation hedge; however, the yellow metal is adding to its morning gains trading near session highs in initial reaction. December gold futures last traded at $1,746.60 an ounce, up 0.86% on the day.

Some markets analysts have said that although inflation pressures are weak, it gives the Federal Reserve room to maintain its ultra-accommodative monetary policies, which is supportive for the precious metal.

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