US Inflation Rate Shows Signs of Cooling

The US inflation rate is expected to continue its downward trend, according to economists surveyed by data provider FactSet. The latest consumer price report, due out on Wednesday, should provide clues about where prices are headed.

Consumer prices rose 3.4% in July from a year earlier, down from 3.5% in June and lower than the recent peak of 4.2% in May. Excluding volatile food and energy categories, core inflation may cool for a second month to 2.5%, down from 2.6% in June.

Average gas prices were lower last month, which should reduce the July inflation reading. However, gas prices rose again in late July, adding uncertainty to future price movements.