U.S. inflation declined slightly in July, with consumer prices increasing 3.4% from a year ago, down from 3.5% in June. The cost of gas and groceries slipped, though prices are still rising more quickly than before the Iran war. On a monthly basis, prices rose just 0.1% from June to July.

Inflation Trends

Excluding the volatile food and energy categories, core inflation slipped to 2.5% in July from a year ago, down from 2.6% in June. Monthly increases at about 0.2% would be low enough over time to bring inflation closer to the Fed’s 2% goal.

Some companies are still struggling with higher costs from tariffs. Julie Robbins, CEO of Earthquaker Devices, an Akron, Ohio-based maker of pedals used to create effects for guitars, said her company has paid $200,000 in tariffs this year and has had to raise prices twice to offset the costs.

Cooler inflation could also ease pressure on the Federal Reserve to raise their key interest rate to combat rising costs. Fed officials are sharply split over their next steps. Roughly half the members of the central bank’s rate-setting committee support raising borrowing costs this year, while another half think rates are already high enough to slowly push inflation back to their 2% target.

Impact on Consumers

For many consumers, years of sharply rising grocery prices have led them to adopt a wide range of coping strategies, from comparison shopping, to couponing, to cutting back on favorite foods. Retailers, including Walmart, have responded by rolling back food prices, a trend that could have lowered July’s inflation figures.

Original reporting: NBC4 Los Angeles — read the source article.