US Inflation Slows to 3.4% Despite Iran War Oil Prices

Inflation is when the prices of things you buy go up over time.

In July, prices in the United States went up by 3.4 percent compared with a year before.

That is actually a bit slower than before, so inflation is easing.

The government agency that checks prices, called the Bureau of Labor Statistics, said prices rose just 0.1 percent from June to July.

Prices are still going up a lot, especially for gas and heating oil.

Gas costs about 24.6 percent more and fuel oil about 39.1 percent more than last year.

One big reason is a war with Iran that has blocked ships from passing through the Strait of Hormuz, an important waterway for oil.

The US central bank, called the Federal Reserve, wants prices to rise only about 2 percent each year, so 3.4 percent is still too high.

Still, the cooler numbers may give the Fed room to decide what to do about interest rates.

Politicians are also watching closely, because there are elections coming soon.