The White House views the U.S. consumer price data for July as encouraging and consistent with the Biden administration's assessment that the current spike in inflation will be transitory, a senior White House official told Reuters.
The official said some of the distortion in auto prices and pandemic-related items such as airline tickets was "coming off the boil," and other items that comprise 87% of the consumption basket had decelerated for three consecutive months.
"This is one month and we don't want to put too much emphasis on it, but what we see in this trend is very consistent with the story we've been articulating for a number of months now," the official said.
The official said used car prices appeared to have crested, and new car prices were not increasing as sharply as they had been. The official said there was still some risk on the inflation front, given the possibility that surging COVID-19 infections could slow increased production of semiconductors in Southeast Asia and South Asia.
"We are encouraged that used cars, which have been such a contributor to CPI in the past couple of months, look to have crested and autos taken as a whole decelerated," the official said, adding that this "suggested that perhaps the biggest increases in that space are behind us."
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