Annual Inflation Slows to 3.4% in July as Consumer Prices Rise Only 0.1% Monthly

The Bureau of Labor Statistics reported that annual inflation slowed to 3.4% in July, marking the second consecutive month of cooling. Consumer prices rose by only 0.1% on a monthly basis, providing some relief to price-weary Americans. This slowdown follows a period of sharp price jumps fueled by the Iran war and tariffs implemented by the administration. While overall inflation is easing, core inflation—which excludes food and energy—remained steady at an annual rate of 2.5%. Wholesale costs also showed signs of cooling, with the producer price index remaining flat for the month. However, experts warn that while current prices are not 'hot to the touch,' the economy remains under pressure as wages are not keeping pace with the cost of living. Retail sales saw a slight decline in July, while mortgage rates remain high, creating hurdles for prospective homebuyers. Despite the cooling inflation, the Federal Reserve remains divided on the timing of the next interest rate hike, with market expectations shifting toward later in the year.

Sources

• NPR
  We learned 5 important things about the economy this week
• AP News
  America In Focus: Inflation cools in July, but so do consumers with their spending
• WSJ
  Opinion | Disinflation Returns, Kevin Warsh’s Critics Hardest Hit
• CNBC
  Wholesale prices were flat in July, below expectations for 0.2% increase
• CNN
  US annual inflation cooled to 3.4% in July as gas prices ease | CNN Business