US Inflation Falls to 3.4% in July, Second Straight Decline After May Spike

US annual inflation eased to 3.4% in the year to July 2026, down from 3.5% in June, the Bureau of Labor Statistics reported. The reading marks a second consecutive monthly decline after a 4.2% year-on-year surge in May. Falling energy prices offset persistent housing cost growth. The rate is now closer to the Federal Reserve's 2% target, though shelter remains the main source of residual pressure.