US Inflation Slows as Core CPI Matches Forecast at 2.5%

US Annual Core Inflation Matches Forecasts at 2.5%

The US core inflation rate, excluding volatile food and fuel costs, eased for the second month to 2.5% in July 2026, the lowest in five months, matching market forecasts. On a monthly basis, core consumer prices rose by 0.2% in July, after being flat in the prior month and in line with market expectations.

US Core Consumer Prices Rise as Expected

Core consumer prices in the United States, which exclude food and energy, rose by 0.2% from the previous month in July of 2026, gaining traction from the hold in the previous month, and in line with market expectations. Prices rose sharply for medical care devices (0.6% vs -0.1% in June), transportation services (0.3% vs -0.3%), and used cars and trucks (0.4% vs -0.2%). Meanwhile, inflation was softer for shelter (0.1% vs 0.1%). From the previous year, core consumer prices rose by 2.5%.

US Inflation Rate Slows as Expected

The annual inflation rate in the US slowed for a second consecutive month to 3.4% in July 2026, from 3.5% in June, in line with market expectations and easing further from the 2023 high of 4.2% reached in May. On a monthly basis, the CPI rose 0.1%, rebounding from a 0.4% decline in June, which marked the first monthly drop since May 2020, also as expected. The index for shelter rose 0.1%, accounting for roughly two-thirds of the monthly all items increase. In contrast, energy prices were down 1.5%. Core consumer prices went up 0.2%, following a flat reading in June, while the annual core inflation rate eased to 2.5% from 2.6% in the previous month, matching forecasts.

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