US prices rose 3.4% in the year to July, slightly lower than the 3.5% in the year to June, new figures show.<\/p>\n
Energy remained volatile as the Middle East conflict has continued. While gasoline prices were down 2.9% in July compared to June, they were up 24.6% over the year.<\/p>\n
Month to month, inflation rose 0.1%, mainly due to an increase in housing costs, the Bureau of Labor Statistics said. Even small moves in rent can lift the overall headline figure as it makes up a large share of household spending.<\/p>\n
Food prices rose only slightly in July and at a slower rate than in June, while energy prices fell, offering some relief for consumers.<\/p>\n
While inflation was slightly lower in July compared to June, those figures show prices are rising more slowly rather than falling.<\/p>\n
Prices excluding food and energy rose 0.2% after staying flat in June, with medical care and airline tickets edging higher and car insurance continuing to fall.<\/p>\n
The new Federal Reserve chair, Kevin Warsh, has said the central bank's priority is to "keep inflation moving down" while avoiding unnecessary shocks to the economy.<\/p>\n
In a recent press briefing, Warsh said the Fed cannot use a "magic wand" to undo years of above-target inflation and must stay patient as price growth cools gradually.<\/p>\n
One of the Fed's key jobs is to keep inflation near 2%, a level policymakers say keeps prices stable, supports steady economic growth, and helps prevent deeper downturns.<\/p>\n
President Donald Trump has also said inflation is still too high for many families, pointing to rent and grocery bills as signs that the cost of living remains a major concern.<\/p>\n
Financial markets reacted calmly to the latest figures, with stocks little changed as the numbers were broadly in line with market expectations.<\/p>\n
Chris Zaccarelli, chief investment officer at Northlight Asset Management, said the figures were \u201cno big surprise" and that inflation is not "reaccelerating".<\/p>\n
Recent labour market concerns have also softened expectations for a rate increase, after July's report showed a loss of jobs.<\/p>\n
Taken together, the two reports \u201cgive the Fed more time to wait", Zaccarelli added.<\/p>\n
Meanwhile, Jeffrey Roach, chief economist at LPL Financial, said inflation is on a \u201creal decelerating course", noting that July\u2019s drop in energy prices \u201chelped soften the inflation pressures of the month".<\/p>\n