Economists optimistic as inflation hits 5%

WASHINGTON (NEXSTAR) - There's good news for the U.S. economy, from another sign of falling inflation.

"Well, I think it was an encouraging report," Stephen Juneau, BofA Global Research Senior U.S. Economist, said.

"I think we're making progress," Bharat Ramamurti, National Economic Council Deputy Director, said.

Ramamurti says seeing the inflation rate drop to 5 percent shows the president's policies are working.

"I don't want to say we're all the way at our goal yet, there's still more work to do," Ramamurti said.

Economists, like Juneau, agree the report is encouraging.

"We're not seeing prices outright fall, but you are seeing kind of that movement in the right direction. You still have inflation way above the fed wants it to be, but there's progress," Juneau said.

The report also shows grocery prices fell for the first time in months.

"You saw food prices fall and where you saw it was in meats, poultry, eggs, and also fruits and vegetables. And these are your staple products and it's obviously encouraging for those at home," Juneau said.

However, Juneau says there still could be a small recession before the country reaches the 2% inflation goal.

"They haven't changed that target and it's going to take some time to get there and it'll probably take a little bit of pain in the economy to really get down to 2%," Juneau said.

Economists estimate it could take until well into next year to hit the target.