U.S. Consumer Prices Edge Up 0.1% in July; Annual Inflation Cools to 3.4%

The Consumer Price Index rose 0.1% in July, rebounding from a 0.4% decline in June, the U.S. Bureau of Labor Statistics reported. Over the past 12 months, the index increased 3.4%, down slightly from 3.5% in June.

Shelter costs rose 0.1% in July, accounting for roughly two-thirds of the monthly increase, while food prices also rose 0.1%, driven by a 0.3% jump in food away from home. Energy prices fell 1.5% for the month, though they remained up sharply over the trailing year.

Core prices, which exclude food and energy, rose 0.2% after holding flat in June, with increases in medical care, airline fares, communication, education, and recreation. Motor vehicle insurance was among the categories that declined. The core index rose 2.5% over the 12 months ending in July, down from 2.6% the prior month.

The report arrives as Federal Reserve officials assess whether inflation is slowing sufficiently to keep interest rates unchanged. The Fed held its target federal funds range at 3.50% to 3.75% at its July meeting, as inflation remained above its 2% objective.