A person loads groceries in plastic bags into their vehicle, May 18, 2026, at a grocery store in Cincinnati. (AP Photo\/Joshua A. Bickel, File)<\/small><\/p>\n
2026-08-12T04:01:06Z<\/p>\n
WASHINGTON (AP) \u2014 Is U.S. inflation stuck at a stubbornly high level<\/a><\/span> or is it steadily cooling? <\/p>\n The government\u2019s latest report on consumer prices, to be released Wednesday, should provide some hints. It will be closely watched by the inflation-fighters at the Federal Reserve as well as Republicans facing tough midterm elections, not to mention consumers still struggling with high grocery prices<\/a><\/span>. <\/p>\n Americans have grappled with worsening inflation since early last year, after tariffs lifted the cost of imported goods. Then this spring, the Iran war raised oil and gas costs, pushing inflation to its highest level in three years<\/a><\/span>. The AI buildout has also increased prices<\/a><\/span> for computer chips and electronic equipment. All three trends could end up having only temporary effects and if they fade, inflation could drop back to the Federal Reserve\u2019s 2% target. <\/p>\n Wednesday\u2019s inflation report is expected to show that consumer prices rose 3.4% in July from a year earlier, according to a survey of economists by data provider FactSet. That would be down from 3.5% in June and lower than the recent peak of 4.2% in May.<\/p>\n On a monthly basis, prices are expected to have risen just 0.1% from June to July, after they fell in June on sharply lower gas costs.<\/p>\n Excluding the volatile food and energy categories, core inflation may cool for a second month, to 2.5%, down from 2.6% in June, according to FactSet. Core prices \u2014 which the Fed pays particularly close attention to \u2014 likely rose 0.2% from June to July.<\/p>\n