The US annual inflation rate cooled to 3.4% in July, driven by a decrease in gas prices. According to the Bureau of Labor Statistics, the Consumer Price Index rose 0.1% on a monthly basis, in line with economists’ expectations.

Inflation Trends

The latest inflation data shows that prices at the pump delivered less of a bite, with gas prices falling 2.9% in July from the month before. The shelter index, which accounts for about one-third of the overall CPI basket, rose just 0.1% in July. Food inflation also slowed, with grocery prices falling by 0.1% in July and running below overall annual inflation at 2.7%.

Core CPI, which strips out food and energy costs, rose 0.2%, bringing the annual rate of inflation to 2.5%. This matches a rate last seen in January and February of this year, which at the time marked a nearly five-year low.

The slowdown in price increases could ease pressure on the Federal Reserve to hike interest rates. Chairman Kevin Warsh has said the bank is committed to bringing down inflation, which has run above the 2% target for years.

Original reporting: KTVZ (Central Oregon) — read the source article.