Breaking: Inflation Rate Drops, Defying Economist Projections
Inflation in the United states in July slowed slightly, with the Consumer Price Index (CPI) rising by 3.4%, below analysts’ expectations of 3.5%. This indicates a cooling of inflationary pressures, following a 3.5% rate in June and 4.2% in May. Gas prices decreased by 2.9% compared to the previous month, and grocery prices slightly declined by 0.1%. While housing costs increased marginally (by 0.1%),prices at hotels and accommodations fell. The core CPI, excluding energy and food, rose by 0.2%, bringing its annual inflation rate to 2.5%, the lowest in nearly five years. Financial markets responded positively, with stock futures climbing and some suggesting this data might delay the Federal Reserve’s plans for interest rate hikes.
Inflation in July dipped below what experts predicted.
The 3.4 percent rate for July was below projections of 3.5 percent from experts polled by The Wall Street Journal.
The inflation rate was 3.5 percent in June, the Bureau of Labor Statistics said.
Inflation was at 4.2 percent in May.
Gas prices fell 2.9 percent in July from the previous month, according to CNN.
Although prices rose in the “shelter” category that covers housing costs, the increase was only 0.1 percent in July as prices fell at hotels, motels, and other accommodations.
🚨 JUST NOW: US inflation cools slightly to 3.4% and 0.1% month over month
The likelihood of the Federal Reserve raising interest rates is PLUMMETING
Good! Keep it going and SLASH rates pic.twitter.com/chstGF6w9w
— Eric Daugherty (@EricLDaugh) August 12, 2026
Grocery prices dropped 0.1 percent in July, posting an overall annual increase of 2.7 percent.
Core CPI, which strips out energy and food costs, rose 0.2 percent in July, which makes its annual rate of inflation 2.5 percent.
The 2.5 percent rate last occurred in January and February and was what CNN termed “a nearly five-year low.”
CNBC reported that stock futures rose in response to the report. S&P 500 Futures rose 0.4 percent, while Nasdaq 100 futures rose 0.9 percent.
The Dow Jones Industrial Average rose 144 points, or 0.3 percent.
Some said the report should delay any interest rate hike from the Federal Reserve.
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