Fed's preferred inflation gauge shows a modest rise in latest sign of slowing price increases

abcnews.go.com:

An inflation gauge closely tracked by the Federal Reserve remained low last month, adding to signs of cooling price increases and raising the likelihood that the Fed will leave interest rates unchanged when it next meets in late September

WASHINGTON — An inflation gauge closely tracked by the Federal Reserve remained low last month, adding to signs of cooling price increases and raising the likelihood that the Fed will leave interest rates unchanged when it next meets in late September.

Thursday's report from the Commerce Department showed that prices rose just 0.2% from June to July, the third straight modest increase. Compared with a year earlier, prices rose 3.3% in July, up from a 3% annual increase in June. The year-over-year figure, though, is down sharply from the 7% peak it reached a year ago, though still above the Fed's 2% inflation target. It rose partly because of much smaller price increases a year ago.

Among individual items, the cost of groceries rose just 0.2% from June to July, though they're up 3.5% over the past year. Energy prices ticked up 0.1%.

The latest data follows other recent reports that suggest the economy and the job market may be slowing enough to cool inflation pressures. The number of advertised job openings, for example, tumbled in July, and fewer Americans are quitting their jobs to seek better opportunities. Both trends ease the pressure on companies to raise pay to find and keep workers — a move that tends to perpetuate inflation as employers raise prices to offset their higher labor costs.

Excluding volatile food and energy prices, “core” inflation ticked up just 0.2% from June to July, the same as from May to June. Compared with a year earlier, core prices rose 4.2%, up slightly