South Florida鈥檚 inflation rate in June fell to its lowest level in three and a half years. Prices last month were up 3.5% compared to a year ago. And there was actual deflation 鈥� a drop in prices and not just a drop in the growth rate 鈥� from April.
One reason for the cooler inflation rate may be a small uptick in the unemployment rate. A year ago, Miami-Dade鈥檚 jobless rate was below two percent.
"That's just about as low as it gets," said Jared Bernstein, chairman of the White House Council of Economic Advisors.
In May, the unemployment rate had risen to 2.2% in Miami-Dade County.
"(The job market) has cooled somewhat and that probably helps on some of the inflation issues. But you've got a tight labor market down there," he said during an interview from his White House office with WLRN.
The number of people in the job market has been growing a little faster than the number of people working. Folks who had been on the sidelines are lured back to the labor force for lots of reasons. Higher paychecks is one. Through March, wages and salaries in South Florida were up almost 7% from a year earlier.
Pay is growing and prices are cooling.
READ MORE: The South Florida economy at mid-year: inflation, housing and jobs still hot
Nationally, the inflation rate actually was negative from May to June, indicating deflation. It fell to an annual growth rate of 3%.
"Wages are beating prices," Bernstein said. Average weekly hourly earnings have been growing at a faster annual pace compared to consumer inflation since the spring of 2023. "That's some real breathing room for folks," he said.
It's a message the Biden administration hopes resonates with voters this fall.
The economy was the top issue for Florida voters in a by Florida Atlantic University, followed by immigration and abortion. The economy is the one area Democratic and Republican voters agree on as an election issue.
"I want to underscore that when people tell us they're facing prices that are still too high, we hear them and we know they're right," Bernstein said.
A survey of dozens of economists found a majority believe inflation would be higher under a second Trump administration compared to a second Biden term. About one in three polled said there would be little difference in the direction of prices regardless if either is in the White House.
Florida consumer sentiment has been stagnant this year. "This muted improvement is due to higher-than-expected inflation observed this year and the Fed鈥檚 decision to maintain interest rates at historically high levels,鈥� said Hector H. Sandoval, director of the Economic Analysis Program at UF鈥檚 Bureau of Economic and Business Research.
One voting member on the Federal Reserve's interest rate setting committee, Atlanta Fed Pres. Raphael Bostic, recently told 港澳天下彩he believes "conditions will likely call for a cut in the federal funds rate in the fourth quarter of this year." He made that comment before the most recent inflation report.
One "banana peel," as Bernstein said, may be stubborn inflation in the services economy 鈥� such things like education, hospitality and car repair. It is a category that's highly sensitive to the workforce and wages instead of global supply chains.
In June, services inflation was 5.1% 鈥� much stronger than the headline figure 鈥� yet it has been slowing on a monthly basis.
"I think this is one of the kind of normalization or cooling in the job market," Bernstein said.
