US Inflation Cools Again, But Still Outpaces Wages

The US Consumer Price Index (CPI) report for July shows inflation has cooled again, but still outpaced paychecks. The Labor Department reported a 0.1% increase in consumer prices from June to July, in line with forecasters' expectations.

Over the year, prices rose by 3.4%, a slower pace than the 4.2% in May and 3.5% in June. This deceleration in year-over-year price increases is good news for consumers struggling with the cost of living, although their paychecks still may not be keeping up.

Average hourly earnings for employees on private nonfarm payrolls rose just 3.2% over the year in July, which means prices are still rising faster than wages. The annual inflation rate remains above the Federal Reserve's 2% target, a trend that has persisted for the past five years.