Inflation continued to cool in July, with the latest government figures coming in largely as expected and doing nothing to upend expectations of an interest rate cut next month by the Federal Reserve.
The Consumer Price Index rose 2.9% from a year earlier, the smallest 12-month increase since March 2021, according to figures published Wednesday by the Bureau of Labor Statistics. Core prices, which exclude food and energy, rose 3.2% over the prior 12 months and 0.2% since June.
Economists had forecast that inflation rose 3% in July on an annual basis, according to financial data firm FactSet.
The Fed has hiked interest rates to their highest point in 23 years as it strives to tame inflation while also keeping the U.S. economy afloat. But a weak July jobs report signaled that the labor market could be buckling under the impact of high rates, boosting economists’ forecasts that the central bank is likely to cut its benchmark rate at its September meeting.
While inflation has been at the forefront of concerns, the unexpectedly soft July jobs report had some investors and analysts fretting about the risk of a recession.
—This is breaking news and will be updated.
Kate Gibson is a reporter for CBS MoneyWatch in New York, where she covers business and consumer finance.
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