LEILA FADEL, HOST:
We're going to get some new information this week about the cost of living.
A MARTÍNEZ, HOST:
It's likely to confirm what most people already know - gasoline and groceries are more expensive than they'd like. And that wouldn't be so bad if wages were keeping up with inflation, but for most people, they are not.
FADEL: NPR's Scott Horsley is here with a preview of this week's economic data. Good morning, Scott.
SCOTT HORSLEY, BYLINE: Good morning, Leila.
FADEL: Let's start with that inflation report, which comes out on Wednesday. What's the expectation there?
HORSLEY: The report is expected to show that consumer prices in July were up about 3.4% from a year ago. That would be a slightly smaller annual increase than we saw in June. But look. Inflation's still uncomfortably high. Kevin Hassett, who runs the National Economic Council at the White House, acknowledged that pain point in an interview this weekend with CNN's "State Of The Union."
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KEVIN HASSETT: I go to the grocery store. I do the shopping, and I keep an eye on prices every week. And there's stuff like the price of beef that's still really, really high and very problematic for people. And we still got a lot of work to do.
HORSLEY: And now the job market is also showing some signs of weakness. Last week, we learned that employers cut 23,000 jobs in July, and more than a quarter million people dropped out of the workforce last month. Employers are not having to pay as much to attract workers these days. Average wages were up just 3.2% over the last 12 months. So when prices are going up faster than wages, it's no wonder a lot of people feel like they're falling behind.
FADEL: Now, the Federal Reserve has long promised to bring inflation under control. But it's still above the Fed's target of 2%.
HORSLEY: Yeah. The Fed is now in a tricky spot. Its usual tool for fighting inflation is to raise interest rates. But, you know, that doesn't do a lot to lower the price of gasoline, which is up because of the war with Iran. AAA says the average price of regular gas is just over $4 a gallon. It has come down in recent days, but it's still about a buck a gallon higher than it was when the U.S. started this war. At its last meeting in July, the Fed kept its benchmark interest rates steady. Investors were kind of expecting a rate increase at the next Fed meeting in September. But that's now not as clear, with the job market looking a little shakier.
FADEL: Trump has repeatedly said he wants the Fed to lower interest rates. Given what's happening with inflation, how likely is that?
HORSLEY: Well, it doesn't look very likely in the near term unless the job market weakens more. And here's the thing. While the Fed sets short-term interest rates, longer-term borrowing costs are generally set by the bond market. And those rates have been going up, not down. The average rate on a 30-year mortgage has climbed to nearly 6.7%, and that's a real drag on the housing market. Home sales were down in June. We're going to get the July home sales numbers tomorrow, and they're also likely to look weak.
FADEL: Speaking of the Federal Reserve, President Trump is trying again to fire one of its board members. What's he doing now?
HORSLEY: Yeah. Trump originally tried to fire Fed Governor Lisa Cook last year. His attack dog, William Pulte, had accused Cook of mortgage fraud, although Cook denies any wrongdoing. And so far, courts have allowed her to remain at the Fed. Even the Supreme Court, which has given this president broad latitude to fire other government officials at the Fed, is a special case. You know, the central bank is designed to be insulated from political pressure so it can make tough economic decisions. But Trump's not giving up. Last week, the White House sent Cook a letter demanding that she answer those mortgage fraud allegations. Her attorney says the allegations are baseless, and he promised to keep fighting to protect her job.
FADEL: NPR's Scott Horsley. Thank you, Scott.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
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