US inflation eased slightly to 3.4 per cent in July, potentially giving the Federal Reserve more flexibility on interest rates ahead of the midterm elections.
Customer checks gas price before she fills up her vehicle's tank at a gas station in Lincolnshire, Ill., Monday, Jun 8, 2026. (Photo: AP/Nam Y. Huh)
13 Aug 2026 12:27AM
WASHINGTON: US consumer inflation slowed slightly in July, government data showed, with a virtual stalemate in the US-Iran war giving consumers some respite from sharp price increases at the gasoline pump.The consumer price index (CPI) rose 3.4 per cent on a year-on-year basis, slowing from a 3.5 per cent increase a month ago, according to data released by the US Bureau of Labor Statistics on Wednesday (Aug 12).The data was in line with the expectations of economists polled by Dow Jones Newswires and the Wall Street Journal.US households have been battered by more than five years of elevated prices since the pandemic hit, and the July data is still well above the Federal Reserve's long-term two-per cent target.Still, with last month's inflation data also showing some easing in prices, the latest reading may give the central bank some room to manoeuver ahead of potential rate hikes.US President Donald Trump's Republicans are facing a stern test in upcoming midterm elections, with Democrats seeking to wrest control of Congress over his handling of the world's largest economy.
