Key takeaways

• Gas prices declined for a second straight month but remain 24.6% higher than a year ago.
• Grocery prices eased in July, with eggs, chicken, cheese, and butter all cheaper than last summer.
• Back-to-school shoppers are seeing higher costs in some areas like kids’ apparel, computers.

The pace of annual inflation eased for the second consecutive month in July as gasoline and grocery prices ticked lower, according to the latest Consumer Price Index data from the U.S. Bureau of Labor Statistics.¹

The CPI rose a seasonally adjusted 0.1% in July. Excluding more volatile food and energy prices, the so-called core CPI rose 0.2%. But on an annual basis, overall inflation eased to 3.4%, while core inflation slowed to 2.5%, both down slightly from June.²   

Here’s a closer look at some of the most notable movers in the more detailed July CPI data.³ 

Gas prices fall; Airfares continue to climb

Drivers saw a 2.9% dip in gas prices in July, following a 9.7% decline in June. Despite two consecutive months of declines, gas is still 24.6% more expensive than a year ago following price surges earlier in 2026.⁴

Broader energy costs fell 1.5% in July, but the picture was mixed beyond the pump. Home fuel oil declined 1.7%, while electricity rose 0.1% and utility gas service increased 0.7%. Overall energy prices are 14.7% higher than a year ago.

U.S. travelers continued to feel the effects of elevated energy costs and other factors. Airfare prices rose another 2.2% in July — marking four consecutive monthly increases — and are 25.5% higher than a year ago.

Elsewhere, some travel prices moved lower as the summer season neared its peak. Lodging away from home fell 2.8% in July, while car and truck rentals fell 3% for the month.

Read more: CPI update: Inflation slows to 3.5% in June as gas prices fall

Grocery price ease in some aisles 

Grocery prices fell 0.1% in July but remain 2.7% higher than a year ago, with some aisles offering more relief than others.⁵

Protein shift: Beef and veal remain 9.4% more expensive than a year ago, including a 13.5% increase for beef roasts. But beef prices overall fell 0.8% in July, pork dropped 1.5%, and chicken fell 0.7%. Chicken is now 2.7% cheaper than a year ago. Eggs have seen an even bigger reversal, with prices down 25.7% annually.

Produce had a July split: Fresh vegetables fell 2.6% in July, including a 4.3% decline for tomatoes, while fresh fruit rose 2.2%. Apples were one of the standouts, rising 2.2% for the month and 11.1% over the past year.

Coffee holds steady: Prices dipped 0.1% in July, but the morning staple remains 10.3% more expensive than a year ago. In the dairy aisle, cheese prices fell 1% in July and are down 4.2% annually, while butter dipped 0.2% for the month and is 8.1% cheaper than a year ago. In contrast, milk prices are 5.1% higher than a year ago. 

Dining out also continued to become more expensive. Food away from home rose 0.3% in July and is up 3.4% from a year ago, maintaining the gap with grocery inflation, which is running lower at 2.7% annually.

Read more: Cool’ produce: Healthier habits propel fruit and vegetable sales

Back-to-school costs: Clothing and computers

Families shopping for the new school year are seeing a mixed picture across clothing, supplies, technology, and activities.⁶ 

Apparel prices are 3.9% higher than a year ago, with girls’ clothing up 5.3% and boys’ clothing up 3.3%. Kids’ footwear has risen a more modest 2.1% annually.

For kids with after-school activities, sporting equipment is 2.9% more expensive than a year ago, while musical instruments and accessories are up 3.8%. Fees for lessons or instruction have risen 1.3% annually.

Families paying for school or care are also seeing higher costs. Elementary and high school tuition and fees are up 3.4% from a year ago, while day care and preschool costs have also increased 3.4%, in line with overall inflation.

Traditional school supplies have seen smaller increases. Educational books and supplies are up 1.2% annually, while stationery and stationery supplies have risen just 1.1%.

Computers are a different story. Prices for computers, peripherals, and smart-home assistants are 3.9% higher than a year ago. Computer software and accessories have climbed an even steeper 21.2% over the past year, including a 0.5% increase in July.

Read more: 529 plan qualified expenses: What counts and what does not