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The Consumer Price Index rose by 8.5% year-over-year in July, but inflation appeared to cool slightly as prices remained unchanged from June.
The numbers in the latest report from the Department of Labor were slightly better than Wall Street estimates which expected an 8.7% year-over-year increase and a 0.2% increase in prices from June.
Energy costs fell in July, dropping by 4.6%, while gasoline prices were down 7.7%. However, both are still up from last year, with energy prices 32.9% higher and gasoline 44% more expensive than last summer.
While consumers are seeing some relief at the pump, they haven't seen relief at the grocery store, with food costs up 1.1% month-over-month and 10.9% higher than last year.
Housing costs were down slightly from June but are still 5.7% higher than in 2021.
Despite seeing modest wage gains in recent months, many people are still struggling as higher prices are eating away those gains. As a result, real average hourly earnings decreased by 0.5% from June and 3.0% over the last year.
Investors reacted positively to the news as the Dow Jones Industrial Average, the Nasdaq, and the S&P 500 all posting gains in early trading on Wednesday (August 10).
"We're not out of the woods by a long shot," Peter Earle, a research fellow at the non-profit think tank the American Institute for Economic Research, said, according to Fox Business. "There's a long way to go, and a lot can happen, before we get back down to that 1.5% to 2.5% annual inflation area that Americans are used to."