Inflation eased in July with consumer prices increasing by 8.5% year over year, the Bureau of Labor Statistics reported Wednesday.
Results were at a slower pace than the 9.1% increase in June and delivered the first sign of relief for consumers who are struggling with high prices over the past two years.
The Consumer Price Index (CPI) was unchanged last month compared to the 1.3% increase in June. Prices began rising sharply in early 2021 with the rate of inflation almost doubling over the past year, affected mostly by new Covid outbreaks and the war in Ukraine.
Economists surveyed by Dow Jones were expecting the CPI to increase 8.7% on an annual basis and 0.2% monthly.
Inflation pressures are still impacting the economy as the Federal Reserve evaluates another big interest rate hike in September.
Core inflation, which does not include volatile food and gasoline prices, was unchanged on a year-over-year basis after increasing 5.9% in June.
Energy costs went down in July dropping 4.6%, although they are 32% higher than a year before. Gasoline prices dropped by 7.7% month over month, but they were still 44% higher compared to last year’s.