US Inflation Eases to 3.4% in July Amid Weak Jobs Report
US consumer inflation eased to 3.4% in July, moderating from June's 3.5% and strengthening the case against another immediate interest rate increase by the Federal Reserve. The Consumer Price Index rose a mere 0.1% in July after falling 0.4% in June, according to data released by the US Bureau of Labor Statistics. This is the second consecutive month that inflation has decreased, following May's sharp rise to 4.2%. Core inflation, which excludes food and energy prices, increased 0.2% in July but remains up 2.5% from a year earlier.
Shelter and food prices drove the overall monthly increase in consumer prices, with shelter rising 0.1% and accounting for two-thirds of the total increase. Food prices also rose 0.1%, while energy prices fell 1.5% in July. Gasoline prices declined 2.9% during the month, helping to contain the headline inflation rate.
The latest inflation figures come as a weak US employment report has added pressure on the Federal Reserve's decision-making process. In July, employers cut 23,000 jobs compared with an average monthly gain of 34,000 over the previous 12 months.