US Inflation Slows to 3.4% as Energy Prices Ease

US inflation cooled to 3.4% in July, marking the second consecutive month of slowdown. According to new data from the Bureau of Labor Statistics, prices rose just 0.1% on a monthly basis, meeting economists' expectations.

The Iran war and its resulting energy shock earlier this year sent inflation to a three-year high, but as peace talks progressed, energy prices have eased, and uncertainty has decreased. However, some cost-of-living concerns persist: Americans' pay gains at 3.2% aren't keeping pace with price hikes.

Christopher Rupkey, chief economist at FwdBonds, noted that while the economy isn't out of the woods from inflation's threat to everyday Americans, price pressures aren't extreme either. The slowdown in price increases may ease pressure on the Federal Reserve to hike interest rates, as Chairman Kevin Warsh has committed to bringing down inflation, which has run above the 2% target for years.

Gas prices fell 2.9% in July from the previous month, contributing to the more temperate CPI readings. Housing price hikes also slowed, with a mere 0.1% increase in the shelter index, and food inflation cooled as well, with grocery prices falling by 0.1%.