WASHINGTON (AP) — Is U.S. inflation stuck at a stubbornly high level or is it steadily cooling? The government’s latest report on consumer prices, to be released Wednesday, should provide some hints. It will be closely watched by the inflation-fighters at the Federal Reserve as well as Republicans facing tough midterm elections, not to mention consumers still struggling with high grocery prices. Americans have grappled with worsening inflation since early last year, after tariffs lifted the cost of imported goods. Then this spring, the Iran war raised oil and gas costs, pushing inflation to its highest level in three years. The AI buildout has also increased prices for computer chips and electronic equipment. All three trends could end up having only temporary effects and if they fade, inflation could drop back to the Federal Reserve’s 2% target.
Wednesday’s inflation report is expected to show that consumer prices rose 3.4% in July from a year earlier, according to a survey of economists by data provider FactSet. That would be down from 3.5% in June and lower than the recent peak of 4.2% in May.On a monthly basis, prices are expected to have risen just 0.1% from June to July, after they fell in June on sharply lower gas costs.
