WASHINGTON (AP) - The biggest drop in airline fares in nearly two decades slowed consumer inflation in July following two months of slightly faster gains.
The Labor Department said Wednesday its consumer price index rose 0.1 percent in July following increases of 0.3 percent in June and 0.4 percent in May.
The July figures indicate inflation pressures remain modest. But economists said the latest data is unlikely to derail expectations that the Federal Reserve will raise interest rates at its next meeting in September, given that the job market has strengthened considerably over the past year.
Core inflation, which excludes energy and food, rose just 0.1 percent in July, after a 0.2 percent June gain.
Energy costs edged up 0.1 percent in July and are 14.8 percent below the level a year ago. Food costs rose a modest 0.2 percent despite another big jump in the price of eggs, reflecting further fallout from the avian flu outbreak.
Over the past 12 months, consumer prices are up just 0.2 percent. Core inflation has risen a modest 1.8 percent.