The US reported a marginal rise of just 0.2 percent in core inflation in July from the previous month, matching the smallest monthly increase in nearly two years.
The overall cost of living, however, rose in July after 12 straight months of declines, fuelled by costlier housing.
The inflation figure the government reported Thursday showed that consumer prices increased 3.2 percent from a year earlier, as compared to analyst expectations of 3.3 percent, AP reported.
Wall Street cheered the news with Dow rising about 400 points.
July inflation data impacts rate moves
The July figure remained far below last year’s peak of 9.1 percent, though still above the Federal Reserve’s 2 percent target.
Thursday’s inflation data is the key metrics the Federal Reserve will consider in deciding whether to continue raising interest rates.
In its drive to tame prices, the Fed has raised its benchmark rate 11 times since March 2022 to a 22-year high. Those rate hikes are believed to have helped significantly slow price increases.
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