US inflation cools to 3.4% in July as food and fuel costs ease
US annual inflation eased to 3.4% in July as food and energy costs cooled from June's pace, according to newly released data. Housing remained the main category still pushing the index higher.
Annual inflation in the United States eased to 3.4% in July, down from June's reading, according to data released this week. The slowdown was driven largely by cooling food prices and a retreat in energy costs, offering households some relief after a stretch of stubborn price pressure earlier in the year.
Housing costs remained the largest single category still keeping the index from falling further, a pattern that has persisted through much of 2026. Rent and shelter costs have proven far stickier than other categories, a dynamic economists have linked to years of under-building in many US metro areas relative to demand.
The reading will factor into the Federal Reserve's deliberations over the pace of any further interest-rate moves, with policymakers weighing the cooling headline figure against housing's continued resistance. Markets took the data as a modestly reassuring signal that disinflation, while uneven across categories, remains broadly on track heading into the autumn.
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