US Inflation Eases Slightly in July Despite Elevated Energy Prices

US consumer inflation slowed slightly in July, according to data released by the US Bureau of Labor Statistics. The consumer price index (CPI) rose 3.4 percent on a year-on-year basis, down from a 3.5 percent increase in June.

The slowdown is welcome news for households battered by five years of elevated prices since the pandemic hit. However, inflation remains above the Federal Reserve's long-term target of two percent.

Energy prices continued to drive price increases, with gasoline up 24.6 percent from a year ago and fuel oil up 39.1 percent. Nevertheless, the energy index as a whole was 1.5 percent lower than in June, indicating a downward trajectory for prices.

Core CPI, which excludes volatile food and energy prices, rose 2.5 percent from a year ago.