US Inflation Eases to 3.4 Percent in July

U.S. inflation slowed in July as consumer prices rose 3.4 percent from a year earlier, down from 3.5 percent in June, according to the Labor Department.

The monthly price increase was 0.1 percent, while core inflation, which excludes volatile food and energy costs, eased to 2.5 percent from a year ago and rose 0.2 percent from June.

Gasoline prices fell 2.9 percent from June to July but remain about 25 percent higher than the same period last year, with the national average price at $4.04 a gallon, 16 cents higher than in June, according to motor club AAA.

Economists said the softer reading may reduce pressure on the Federal Reserve to raise its key interest rate, but officials remain divided.