The annual inflation rate in the US slowed for the second consecutive month in July 2026, easing to 3.4% from 3.5% in June, in line with market expectations. This marked a further move below the 2023 peak of 4.2% reached in May, as the impact of the energy shock triggered by the war with Iran continued to diminish.
Energy-related price pressures moderated: gasoline prices rose 24.6% year-on-year, down from 26.7% in June, while fuel oil prices increased 39.1%, compared with 42.9% previously. Inflation in shelter also edged lower, to 3.2% from 3.3%, while food inflation held steady at 3%.
On a monthly basis, the CPI rose 0.1%, as expected, rebounding from a 0.4% decline in June. The shelter index increased 0.1% and accounted for roughly two-thirds of the overall monthly gain. Food prices also rose 0.1%, while gasoline prices fell 2.9%.
Core consumer prices, which exclude food and energy, rose 0.2% on the month after a flat reading in June. On an annual basis, core inflation eased to 2.5% from 2.6% in the prior month, matching consensus forecasts.
