U.S. consumer prices in July were up 3.4% from a year ago, a smaller annual increase than in May or June, making a September Fed rate hike less likely, according to NPR.
Key facts
- Consumer prices in July rose 3.4% from a year earlier, according to NPR.
- The annual increase was smaller than in May or June.
- Gasoline and grocery prices fell.
- NPR reported a September interest rate hike by the Fed now appears less likely.
Consumer prices in the United States rose 3.4% in July compared with a year earlier, a smaller annual increase than the figures recorded in May or June, according to NPR. The report attributed the slowdown in part to falling gasoline and grocery prices.
The cooling in the annual inflation rate offers some relief to households, particularly for everyday essentials. Declines in the price of gasoline and groceries are among the most visible for consumers, as both are frequent purchases.
NPR reported that the moderation in price growth makes it less likely the Federal Reserve will feel the need to raise interest rates when policymakers meet in September.
A single month of easing does not by itself confirm a lasting trend, but the smaller annual increase compared with the prior two months marks a notable shift.
Why it matters
Inflation affects how far household budgets stretch. According to NPR, the cooler July reading makes a September Fed rate hike less likely.
Frequently asked questions
How much did consumer prices rise in July?
According to NPR, consumer prices in July were up 3.4% from a year ago, a smaller annual increase than in May or June.
What caused inflation to ease in July?
NPR reported that falling gasoline and grocery prices contributed to the smaller annual increase in consumer prices.
Will the Federal Reserve raise interest rates in September?
NPR reported that the easing in inflation makes it less likely the Fed will feel the need to raise interest rates in September.