The cost of consumer goods and services rose mildly in July, adding to a narrative of slowing inflation and cementing the likelihood the Federal Reserve will cut interest rates next month.
The consumer price index increased 0.2% last month, the government said Thursday. The measure had fallen in June for the first time since 2020.
The 12-month rate of inflation slowed to 2.9% from 3.0% and touched the lowest level since the spring of 2021.
The more closely followed core CPI that strips out food and energy also rose 0.2%.
The yearly rate of core inflation edged down to 3.2% from 3.3%, also the lowest level in three years.
The Fed in mid-September is widely expected to cut high U.S. interest rates put in place to quell the worst bout of inflation since the 1980s.
As inflation slows and returns to low pre-pandemic levels, the central bank wants to reduce borrowing costs and ease the stress on the economy.
High rates have socked the housing market, restrained car sales, driven manufacturers into a slump and depressed business investment.
