COOLING OFF

Spiraling Inflation Slowed in July, Easing Economists’ Worst Fears

But it’s not clear that big price hikes will reverse any time soon.

Inflation slowed in July as airfares and gas prices dropped, in an encouraging cooldown of the overheating U.S. economy. In the year through July, the Consumer Price Index rose by 8.5 percent—down from the 9.1 percent that was registered in June. The reprieve in price rises was bigger than economists had hoped for, though consumers are still facing hefty increases this year. When food and fuel costs are not included, prices have climbed by 5.9 percent through July, which is the same as the previous measurement. That’s because the reduction in costs at the gas pump in July was counteracted by further rises in rent and food costs. But July did see an overall deceleration in core inflation on a monthly basis, with last month recording a rise of 0.3 percent, compared with 0.7 percent in June.