Inflation Cools Slightly as Consumer Spending Slows

The latest economic data shows that inflation has cooled down in July, but consumer spending has also slowed. The Consumer Price Index (CPI) rose 3.4% in July from a year ago, down slightly from 3.5% in June.

This news comes as the Federal Reserve is divided over whether to hike interest rates to combat inflation. The Fed kept its key interest rate unchanged at about 3.6%, but the vote was 9-3, with three dissenters favoring a rate hike.

Retail sales also saw a significant drop in July, falling 0.6% last month, the biggest decline since May 2025. This is attributed to the fading effect of government tax refunds, which boosted spending in April and May.

The Producer Price Index (PPI) rose 4.7% in July from a year ago, down from a much larger 5.5% increase in June. Wholesale prices were unchanged from June to July.