Gas prices drop as beef, bacon and airfare climb in July inflation report
Gas prices drop as beef, bacon and airfare climb in July inflation report
Gasoline fell for the second straight month in July, but increases in shelter kept overall inflation from moving lower.
Gas prices drop as beef, bacon and airfare climb in July inflation report
Gasoline fell for the second straight month in July, but increases in shelter kept overall inflation from moving lower.
08.13.2025
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·Gas prices drop as beef, bacon and airfare climb in July inflation report
Key takeaways:
- Shelter costs rose 0.2% in July
- Gasoline prices fell 2.2% in July and are down 9.5% year over year
- Airfare jumped 4% in July after falling the previous month
July’s CPI held steady at 2.7% year over year, as lower gas prices were outweighed by rising housing, airfare, and food costs, according to the Bureau of Labor Statistics.
Prices barely moved in July, but under the surface, there was plenty of activity. Inflation rose 0.2% for the month — slightly below June’s 0.3% — and stayed at 2.7% compared with a year earlier, according to the latest Consumer Price Index (CPI) from the Bureau of Labor Statistics.1 Falling gas prices helped keep inflation low, but shelter costs once again led the upward charge, with airfare, beef, and bacon also making notable moves.
Core inflation, which excludes food and energy costs, rose 0.3% in July, higher than June’s 0.2% — marking the largest increase in six months — with core inflation up 3.1% YOY.2
Gas prices decline, but housing keeps inflation elevated
Gas was the standout in the “good news” column. Prices at the pump fell 2.2% in July, after a 1% rise in June, and are now 9.5% lower than they were a year ago.3 That helped pull the broader energy index down 1.1% for the month.4
Housing costs, which make up more than a third of the CPI, continued their steady climb. Shelter rose 0.2% in July and is up 3.7% YOY, while rent and owners’ equivalent rent both rose 0.3%.5
Read more: How empty-nest homes fit into the housing equation
Beef, bacon, haircuts and airfare all got pricier
Airfare saw a sharp rebound, jumping 4% in July after falling slightly in June.6 Prices for household furnishings and used vehicles also rose, while new vehicle prices held steady. Haircuts edged up 0.1% month-over-month, putting styling at a 19% increase since July 2019.7
Food prices stayed flat overall, but specific categories moved noticeably:8
- Beef steaks: up 2.3% in July, 12.4% YOY
- Ground beef: up 2.4% in July, 11.5% YOY
- Bacon: up 0.6% in July, 4.6% YOY
- Coffee: up 2.3% in July, 14.5% YOY
Dining out costs also increased, with food away from home rising 0.3% for the month and 3.9% annually.9
Read more: Designer dining: How luxury brands are setting the table
Medical care, back-to-school prices see mixed moves
Healthcare costs continued to climb, with medical care services up 0.8% in July. Dental services jumped 2.6% and hospital costs rose 0.4%. Prescription drugs were a rare outlier, falling 0.2%.10
As families prepared for back-to-school season, price changes were mixed:11
- Boys’ apparel: down 0.6%
- Girls’ apparel: up 0.3%
- Footwear: up 0.7% for both boys and girls
- College textbooks: up 0.4%
- Computers, peripherals, and smart home assistants: down 1.2%
- Computer software and accessories: down 2.6%
- Tuition and childcare: up 0.4%
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1 Bureau of Labor Statistics, “Consumer Price Index – July 2025,” Aug. 12, 2025.
2 Yahoo! Finance, “CPI report: Core inflation rises by most in six months, stoking tariff-driven price concerns,” Aug. 12, 2025.
3 Bureau of Labor Statistics, “Consumer Price Index – July 2025,” Aug. 12, 2025.
4 Ibid
5 Ibid
6 Ibid
7 Ibid
8 Ibid
9 Ibid
10 Ibid
11 Ibid
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