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July Inflation Report: Prices Rose Just 0.1%, But Airfares Are Up 25% From a Year Ago

Shelter and airline fares kept pressure on household budgets even as headline inflation cooled, the Bureau of Labor Statistics reported.

By THRYV Money Desk·Published August 13, 2026·Updated August 13, 2026·4 min read
July Inflation Report: Prices Rose Just 0.1%, But Airfares Are Up 25% From a Year Ago
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The takeaway

The Consumer Price Index rose 0.1% in July and 3.4% over the past year, the Bureau of Labor Statistics reported August 12. Core prices, which exclude food and energy, climbed 0.2% for the month. Shelter drove roughly two-thirds of the increase, while airline fares jumped 2.2% for the month and 25.5% year-over-year.

Consumer prices rose 0.1% in July and 3.4% over the past 12 months, the U.S. Bureau of Labor Statistics reported on August 12. Core inflation, which strips out volatile food and energy prices, climbed 0.2% for the month and 2.5% year-over-year — figures that came in on the mild side even as a few categories kept costs elevated for households.

Shelter is still doing most of the work

Shelter costs accounted for roughly two-thirds of July's overall increase, the BLS said. The owners' equivalent rent index and the rent index each rose 0.3% for the month, continuing a pattern that has kept shelter the single biggest driver of inflation for much of the past two years.

What got cheaper, and what didn't

  • Energy fell 1.5% in July, after a steeper 5.7% drop in June, with gasoline down 2.9% for the month but still 24.6% higher than a year ago
  • Food prices edged up 0.1% overall; food away from home rose 0.3% while food at home dipped 0.1%, helped by a 16.4% monthly drop in lettuce prices
  • Airline fares were the standout mover, up 2.2% for the month and 25.5% over the past year
  • Medical care services rose 0.4% for the month
  • Motor vehicle insurance fell 0.3%, after a 2.0% drop in June

Why it matters for the Fed's next move

The Federal Reserve held its benchmark rate at 3.50%–3.75% at its July 28–29 meeting and is next scheduled to meet September 15–16. A cooler-than-feared headline inflation print gives policymakers some room, but core inflation running at 2.5% — still above the Fed's 2% target — means the shelter and services categories driving that gap will stay under close watch heading into the fall.

The bottom line

Overall inflation is cooling, but if you're flying anywhere, you're paying a lot more than a year ago — airfares are the fastest-rising major category in the July report.

Sources

This article is original writing by THRYV. We link to primary reporting and official documents rather than reproducing them.

  1. Consumer Price Index Summary — July 2026 — U.S. Bureau of Labor Statistics

Why you can trust this article

Written and edited in-house by the THRYV Money Desk. We do not republish or reword agency copy, and we do not invent quotes, statistics, testimonials or ratings. Where figures move frequently, we point you to the primary release rather than printing a number that will be out of date. Advertising and affiliate partnerships have no influence on our reporting — see our editorial standards, fact-checking policy and affiliate disclosure. Spotted an error? Write to newsroom@thryv-news.com.

General information only. Not personalised financial, medical or legal advice.

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