Archive · 12 Aug 2026
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.
US consumer inflation slowed to 3.4% year-on-year in July, matching economist expectations.
The consumer price index rose 0.1% from the previous month, per US Bureau of Labor Statistics data.
July's reading remains well above the Federal Reserve's 2% long-term target.
Gasoline prices were up 24.6% and fuel oil up 39.1% year-on-year, though the overall energy index fell 1.5% month over month.
Inflation jumped from 2.4% in February to a three-year high of 4.2% in May after the war with Iran disrupted shipments through the Strait of Hormuz.
- Who
- The US Bureau of Labor Statistics released the data; President Donald Trump's administration and the Federal Reserve are central to the story.
- What
- US consumer inflation slowed to 3.4% year-on-year in July, with the CPI rising 0.1% from June.
- When
- July 2026; the government released the data on Wednesday.
- Where
- United States
- Why
- Inflation eased slightly despite turbulent oil prices linked to the war with Iran, though energy prices still surged year over year; the reading is politically significant ahead of the midterm elections.
- Year-on-year inflation (July)
- 3.4%
- Monthly CPI change
- +0.1%
- Federal Reserve long-term target
- 2%
- May inflation (three-year high)
- 4.2%
- Gasoline prices (year-on-year)
- +24.6%
- Fuel oil prices (year-on-year)
- +39.1%
- Energy index (monthly)
- -1.5%
- Data source
- US Bureau of Labor Statistics