Inflation Slows Down: Food & Fuel Prices Slip

Sun Sep 06 2026 05:12:25 GMT+0000 (Coordinated Universal Time)

US inflation falls to 3.4% in July as food and fuel costs ease – a temporary win for families and the Fed’s price‑control effort.

The U.S. consumer price index in July rose 3.4% year‑on‑year, a slight dip from June’s 3.5%. Food prices only nudged up, while gasoline fell nearly 3%, though still 24% higher over the past year. Housing ticks up the headline figure, but overall inflation moves at a gentler pace, easing consumer strain. The Fed’s new chair stresses steady, patient progress toward a 2% target, while markets shrug at the data as labour worries soften expectations for rate hikes.

Inflation Slows Down: Food & Fuel Prices Slip

By Francisco Velasquez • 12 August 2026, 13:49 BST • Updated 59 minutes ago

US prices rose 3.4% in the year to July, a slight drop from June’s 3.5%. The data shows that food costs are rising modestly, while gasoline prices fell 2.9% month‑to‑month. This creates a bit of breathing room for families.

Energ y remains volatile, driven by geopolitical tensions. Even though July’s energy‑price dip is welcome, gasoline is still 24.6% higher year‑on‑year.

Housing costs grow only a touch, and because rent makes up a large slice of household budgets, even small rent hikes lift the headline inflation figure.

All‑ex‑food‑and‑energy data rose 0.2% after staying flat in June, with medical and airline prices inching higher and car insurance falling.

Fed Chair Kevin Warsh says the central bank will keep working to bring inflation down toward 2% while avoiding abrupt shocks to the economy. He stresses patience as price growth cools gradually.

President Donald Trump echoed concerns, pointing to rents and grocery bills as signs that cost of living remains tough for many families.

Financial markets reacted calmly – stocks barely moved, as the figures were broadly in line with expectations. Labour market worries also dampened hopes of a quick rate hike, after July’s report showed a loss of jobs [see details].

In short, inflation is easing a touch, but the fight for price stability continues. Stay tuned for more data and how the Fed’s decisions may shape your pocket.