Today we learned that consumer prices are still climbing at a rapid rate, but not quite as fast as they were earlier this summer. The U.S. Department of Labor reported that inflation has pulled back from a four-decade high. Last month, a big drop in gasoline prices helped to offset the rising cost of groceries and other goods and services. And we're going to dig a little a little deeper now into what this means with NPR White House correspondent Asma Khalid, who's in Saint Petersburg, Fla., today, and economics correspondent Scott Horsley in Washington. Hey to both of you.

ASMA KHALID, BYLINE: Hi there.

CHANG: Hey. All right, Scott, let's start with you, because as always, you have been digging into the numbers. What's happening to the cost of living?

HORSLEY: Well, it is still going up, but not as fast as it was in June. The annual inflation rate was over 9%, which is something we had not seen in decades. In July, that rate came down just a bit to 8.5 percent, so still sizzling, but a little cooler than the month before. The overall price index actually didn't rise at all between June and July. And that is largely because of that steep drop we've seen in gasoline prices. Prices at the pump have fallen by about a dollar a gallon after hitting a record high back in June.

We also saw a pretty big drop last month in travel-related costs for things like airfare and rental cars and hotel rooms. And economist Julia Coronado of MacroPolicy Perspectives thinks that's a sign that the era of what she calls revenge travel, when people were willing to pay whatever it costs to make those trips they'd put off during the pandemic...

HORSLEY: ...Is now coming to an end.

JULIA CORONADO: Now they have that vacation under their belt. Now it's like, OK, now we can resume kind of normal spending behavior where we pick and choose how and where to spend our money based on the best deals available.

HORSLEY: And that's important because, ultimately, it's that kind of selective shopping that helps keep prices in check. One reason gas prices have come down is people actually started driving less.

CHANG: Right. But let's be very clear. Inflation has not gone away. So are other prices still going up?

HORSLEY: They are, yeah. Food prices are up nearly 11% over the last year. That's the biggest a year increase since 1979. Housing costs are up nearly 6%. Electricity prices are up more than 15%. And those power prices are tough during these hot summer months when a lot of people's air conditioners are running around the clock.

CHANG: Including mine. Asma, I know that you've been talking with people this week who are really feeling these higher prices. What are they telling you?

KHALID: Well, that's right. And I've been reporting in the Tampa Bay metro area. In part, I came down here because inflation costs have consistently outpaced the average inflation rate in the country. And, you know, Scott spoke about electric prices. I've heard a lot about electricity bills here from people. Food prices are also a huge concern. I spoke with a young woman who owns a custom bakery in Clearwater, Fla. Her name is Jennifer Jacobs, and she told me her ingredient costs have soared. She's been particularly frustrated with the cost of eggs, and she needs a lot of them to make cakes.

JENNIFER JACOBS: I buy a box of 15 dozen eggs. I buy a couple of those boxes each week. Used to be $15 a box in 2020. It's gone up so much that it was $62 last week. So it's risen almost - what? - four times the price.

KHALID: And, Ailsa, I will say, you know, her individual story is unique, but the sentiment is common. I spent some time outside of a Walmart earlier today. It was easy to find people who were willing to share an earful about rising prices. And on top of that, this is a region where housing prices have been increasing faster than other parts of the country. I spoke with a couple of different young people, young working people who told me that they ultimately decided to move back in with their families, with their parents, because they've been squeezed by rising rent prices. And they can no longer afford their current rent.

HORSLEY: Now, to be sure, Ailsa, we should point out wages have been going up as well. On average, wages in July were up 5.2% from a year ago. But prices are climbing faster than that. So even though people's paychecks are getting bigger, they're not stretching as far as they used to.

CHANG: Right, that may be so. But President Biden, I mean, he took a bit of a victory lap about the new data out. And here he is at the White House earlier today.

PRESIDENT JOE BIDEN: Well, the price of some things go up - went up last month. The price of other things went down by the same amount. The result, zero inflation last month. But people are still hurting with zero inflation last month.

CHANG: I mean, Asma, I'm wondering, based on what you're hearing from voters, how do you think that 0% inflation message is going over with them right now?

KHALID: You know, Ailsa, I will say I think this is an example of how the White House has been struggling with the political message around inflation. Some of the voters that I spoke with told me that they have been frustrated because they feel like the government is telling them that things are getting better economically, but they're not feeling that in their individual lives. And so when there is that disconnect, they ultimately will say to me that they don't necessarily trust the White House message around the economy.

I went to a really busy food pantry here in St. Petersburg, and I met a woman. Her name is Jill Mallen. She's on disability. She has bone cancer. And she told me that she's come to rely on the food pantry because she can no longer afford buying her groceries at a grocery store. And she does admit that the economy is affecting the way that she feels about politics.

JILL MALLEN: I'm confused. I'm a registered Democrat. And I have issues with our former president, but some things I liked better under the Republican Party. But I don't like the untruths that took over with that party, even though I like the economy better.

KHALID: You know, Ailsa, the reason I came here to Pinellas County is that it's one of these exceedingly rare so-called boomerang counties, meaning it went for President Obama, then for President Trump, and then subsequently for President Biden. So it's a real mixed political place. And I wanted to hear how voters are interpreting the economy. And, you know, voters like Jill, I will say, are somewhat unclear about what they think Biden should be doing differently about the economy. But I will say there is a fairly common sentiment that I'm hearing that voters want the government to be able to do more to offer a clear picture of an economic solution for them.

CHANG: Yeah. Well, Scott, do you have any sense of where inflation is going to go from here?

HORSLEY: Well, investors are hoping that this report is a sign that the worst of inflation is now behind us. Of course, they've hoped that in the past, and it's turned out to be wrong. But they are hoping that the Federal Reserve will feel a little more room now to be gentler in tapping the brakes on inflation. That would be welcome news on Wall Street. And the Dow Jones Industrial Average jumped more than 535 points today.

CHANG: That is NPR's Scott Horsley in Washington and NPR's Asma Khalid in Saint Petersburg, Fla. Thanks to both of you.

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