The US Consumer Price Index (CPI) increased 3.4% year-over-year in July 2026, easing from 3.5% in June. The decline marked the second consecutive month of cooling annual inflation and matched market expectations of 3.4%.
On a monthly basis, consumer prices increased 0.1%, following a 0.4% decline in June. Annual inflation had fallen to 2.4% in the first two months of the year before accelerating to 3.3% in March, 3.8% in April and 4.2% in May. Inflation subsequently eased to 3.5% in June and 3.4% in July.
Core CPI, which excludes volatile food and energy prices, increased 0.2% month-over-month and 2.5% year-over-year in July. Both figures were in line with market expectations. The second consecutive decline in headline annual inflation indicates that price pressures have moderated from their May peak, while investors continue to closely monitor inflation data for its potential implications for the Federal Reserve’s monetary policy outlook.
