Business & Markets
U.S. inflation eases to 3.4% in July as gasoline prices fall
The monthly reading was restrained by a 2.9% drop in gasoline prices, but energy costs were still 14.7% higher than a year earlier.
Executive summary
- The latest: The U.S. consumer price index rose 0.1% in July after falling 0.4% in June, and was 3.4% higher than a year earlier.Bureau of Labor StatisticsAssociated PressAxios
- The main restraint: Energy prices fell 1.5% during the month, including a 2.9% decline in gasoline, even though the energy index remained 14.7% above its July 2025 level.Bureau of Labor StatisticsAssociated Press
- Underlying inflation: Prices excluding food and energy increased 0.2% in July and 2.5% over 12 months, both slightly faster monthly but slower annually than in June.Bureau of Labor StatisticsAssociated Press
- What to watch: The report showed only a limited near-term pass-through from renewed Middle East fighting, but gasoline prices rose later in July and August, leaving the next inflation reading exposed to higher fuel costs.Associated PressAxios
U.S. inflation slowed slightly in July as lower gasoline prices offset increases in shelter, restaurant meals and medical care. The consumer price index rose 0.1% from June and 3.4% from a year earlier, down from a 3.5% annual rate in June, the Bureau of Labor Statistics reported Wednesday.Bureau of Labor StatisticsAssociated PressAxios
Energy prices fell 1.5% during the month, with gasoline down 2.9%. That decline helped contain the headline number after volatile moves tied to the Middle East conflict, but it did not erase the earlier shock: energy costs were still 14.7% higher than a year earlier, and gasoline was up 24.6% over the same period.Bureau of Labor StatisticsAssociated PressAxios
Inflation excluding food and energy rose 0.2% in July after being unchanged in June. The core index was 2.5% higher than a year earlier, down from 2.6% in June. Shelter rose 0.1% and accounted for roughly two-thirds of the overall monthly increase, while medical care increased 0.4% and airline fares climbed 2.2%.Bureau of Labor StatisticsAssociated Press
Food prices increased 0.1% for the month and 3.0% over the year. Grocery prices edged down 0.1%, but meals away from home rose 0.3%. Fruit and vegetable prices were 5.1% higher than a year earlier, while dairy prices were 0.5% lower.Bureau of Labor Statistics
The report offered some evidence that the renewed conflict with Iran had not yet spread broadly through consumer prices. Associated Press and Axios noted, however, that gasoline prices rose later in July and August, meaning the July index may not capture the full effect of the latest energy-market disruption.Associated PressAxios
The Federal Reserve will weigh the modest easing in annual inflation against still-elevated energy costs and a weaker labor market when it considers its next interest-rate decision. The July figures do not resolve that tradeoff, but they reduce the immediate pressure created by the sharp energy-driven inflation increases earlier in the year.Associated PressAxiosBureau of Labor Statistics