On Thursday’s broadcast of MSNBC’s “Morning Joe,” Steve Rattner, who served as counselor to the Treasury Secretary in the Obama administration, said that without declines in gas prices, “you would have had inflation at around a [0.5%] rate” and that most of the decline in gas prices is due to falling demand, such as people in the U.S. driving less.

Rattner said, “Why was there no inflation from June to July? … [G]asoline declined, as you just mentioned, very substantially. And that exactly offset the increases in other prices. And so, they, in effect, zeroed each other out. Without that change in gasoline prices, you would have had inflation at around a [0.5%] rate, still a lot better than what we’ve seen, still a little bit — still a bit more than what we want. Now, if you look at it year-over-year, so this July compared to last July, you can see that prices are rising still steeply, although slightly less steeply. Last month, in June, they were up 9.1%. That came down to 8.5% in July, a little bit less than people expected. And that’s — and that is all good news. That is all good news. But it is important to note that even if prices didn’t go up at all the rest of this year, we’d still have 6.5% inflation this year.”

He added, “It is kind of un-American to be against falling gas prices and to be unhappy when gas prices fall. They have fallen for a few reasons, and most of them do have to do with the demand side. Obviously, there isn’t a lot of new supply coming on, we are producing a little bit more, but that’s not enough to matter. What’s really happening is a couple of things: First, China is very slow at the moment, and their gas, their overall oil usage has been very uncharacteristically low, and that’s had an impact on prices. And secondly, there has been demand destruction. In the U.S., for example, people are driving less, they’re using less gasoline. … And the Europeans, because of the war in Ukraine, are also taking measures to cut back on their oil use and all of that has had a very positive effect on oil prices.”

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