Inflation Eases Slightly to 3.4% as Gas Prices Drop

US inflation eased slightly in July, dipping to an annual rate of 3.4%, down from 3.5% in June and matching market expectations. This is a back-to-back drop in inflation, following a three-year high of 4.2% in May.

The monthly Consumer Price Index (CPI) also rose by 0.1%, compared to -0.4% in June, meeting the forecasted rate.

Core CPI, which excludes food and energy prices, decreased slightly to 2.5% year-on-year, from 2.6% in June, aligning with market estimates. Core CPI rose by 0.2% on a monthly basis, surpassing the 0% reading in June.

The downward trend in inflation was largely driven by lower gasoline prices, which dropped by 2.9% in July.