Inflation shows cooling signs as consumer prices rise at moderate pace

The Consumer Price Index rose 3.2% in the 12 months through July and the measure that excludes energy and food prices rose 4.7%, the Labor Department said Thursday.

Why it matters: Despite an uptick in overall inflation, underlying details point to further signs of cooling last month as the steep price gains that plagued American consumers look to be moderating.

Between the lines: The 12-month change in overall CPI is up slightly from the 3% registered in June.

• But that uptick is because of so-called "base effects." Since the data is lapping the period in July 2022 when energy prices plunged, the annual figure released on Thursday looks higher.
• The core measure, which removes energy prices and food costs, continued to cool in the 12 months through July, ticked down from the 4.8% in June.

By the numbers: On a monthly basis, price gains were moderate. Overall CPI rose 0.2% in July, the same pace as in June.

• Core CPI rose by the same amount, matching the prior month's pace.

Details: Shelter, auto insurance and education were among the categories that saw prices increase in July, while prices for airline fares, used cars and trucks were among those that declined outright.

Where it stands: The Federal Reserve continued its rate-hiking campaign last month to tackle inflation after pausing in June.

• Officials say any further rate increases later this year will depend on what a slate of economic data, including Thursday's CPI report, suggests about inflation's path.

Editor's note: This story was updated with a new chart.