US inflation eased slightly in July, with annual consumer price growth falling to 3.4%. However, prices remain well above levels seen before the war with Iran.
Core inflation, which excludes food and energy, rose 2.5% from a year earlier and increased 0.2% from June. Food and service prices, including housing, transportation and medical care, also remained elevated.
Energy prices fell slightly during the month, with gasoline prices dropping nearly 3%. However, gas remains about 15% more expensive than a year ago, averaging around $4 a gallon in the US.
The latest data comes as the Federal Reserve weighs its next interest-rate move. A weaker July jobs report, combined with easing inflation, could reduce pressure on the Fed to raise rates, although officials remain concerned that inflation is still above the central bank’s 2% target.
The Fed is set to receive another round of inflation and employment data before its September meeting, which could play a key role in determining the next policy move.
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