Explore the latest developments concerning US inflation eases.
US inflation eases as food and fuel costs cool
US prices rose 3.4% in the year to July, slightly lower than the 3.5% in the year to June, new figures show.
Energy remained volatile as the Middle East conflict has continued. While gasoline prices were down 2.9% in July compared to June, they were up 24.6% over the year.
Month to month, inflation rose 0.1%, mainly due to an increase in housing costs, the Bureau of Labor Statistics said. Even small moves in rent can lift the overall headline figure as it makes up a large share of household spending.
Food prices rose only slightly in July and at a slower rate than in June, while energy prices fell, offering some relief for consumers.
U.S. Stock Futures Rise After In-Line Key Inflation Data
The Department of Labor reported that the headline consumer price index (CPI) rose 0.1% in July, in contrast to a decline of 0.4% in June. However, the headline CPI print was in line with the Zacks Consensus Estimate. On the other hand, the headline CPI rose 3.4%, annually in July, down from the 3.5% annual rise in June.
Core CPI (excluding volatile items like food and energy) rose 0.2% in July after remaining unchanged in June. Like CPI, the core CPI print was in line with the Zacks Consensus Estimate. Core CPI rose 2.5% annually in July, below the 2.6% annual rise in June.
The benign CPI and core CPI data for July may enable the Fed to stay away from hiking the benchmark interest rate in its upcoming September FOMC meeting. Fed officials will consider both the July and August inflation readings before meeting in September. Before today's inflation data, the CME FedWatch tool has assigned a 50% probability for a September rate hike.
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Inflation remained stubborn in July as wages slowed for workers
Inflation as measured by the consumer price index rose 0.1% from June to July, the Bureau of Labor Statistics said Wednesday, showing that costs broadly remained elevated for consumers amid volatile energy prices.
But in a troubling sign for consumers, it remains above the rate of wage growth, which as of last month was pacing at 3.2%, according to the BLS. Average hourly earnings slipped 0.2% from a year earlier, as well, the agency said Wednesday.
Inflation has been wiping out wage gains for the past four months, Heather Long, chief economist at Navy Federal Credit Union, wrote on X.
“For middle-income and lower-income Americans, this is the key issue,” Long wrote. “There will likely be some belt-tightening ahead.”
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