July consumer prices rose 0.1% month-over-month, matching forecasts, while core inflation held steady at 2.5% annually.
US consumer prices increased 0.1% in July from June, aligning with expectations, as the annual inflation rate eased to 3.4% from 3.5% in June. The slowdown follows a peak of 4.2% in May, driven by cooling energy costs after earlier spikes tied to geopolitical tensions.
Core inflation, excluding food and energy, rose 0.2% month-over-month and 2.5% year-over-year, also in line with forecasts. Wage growth trailed inflation, with average hourly earnings up 3.2% annually, leaving consumers with diminished purchasing power.
The Federal Reserve’s 2% inflation target remains out of reach, complicating the September interest rate decision. Policymakers await further data before signaling potential cuts.