The Labor Department reported that the Consumer Price Index increased by 0.2% in July (seasonally adjusted), following a 0.3% gain in June. The all items index increased 2.7% over the past year, matching June’s annual rate. July’s monthly increase was largely driven by a 0.2% rise in the shelter index, which remained the largest contributor to the overall gain. The food index was unchanged, as a 0.3% rise in food away from home offset a 0.1% decline in food at home. The energy index fell 1.1% in July, with gasoline prices down 2.2%, though electricity slipped just 0.1% and natural gas fell 0.9%. Core CPI (all items less food and energy) increased 0.3% in July, after a 0.2% rise in June, and registered a 3.1% year-over-year gain. Categories showing notable annual increases included motor vehicle insurance (+5.3%), shelter (+3.7%), medical care (+3.5%), household furnishings (+3.4%), and recreation (+2.4%).

The EIA’s August 2025 Short-Term Energy Outlook (STEO) forecasts a significant decline in Brent crude oil prices, averaging $67 per barrel in 2025 and $51 in 2026. This drop is driven by large global oil inventory builds, expected to exceed 2 million barrels per day (b/d) in Q4 2025 and Q1 2026—0.8 million b/d higher than in last month’s STEO—following OPEC+’s accelerated production increases. Retail gasoline prices are expected to average below $2.90 per gallon next year, roughly 20 cents/gal lower than this year. The Henry Hub natural gas spot price is projected to rise from $3.20 per million British thermal units (MMBtu) in July to $3.90/MMBtu in Q4 2025 and $4.30/MMBtu in 2026, primarily due to flat domestic production and increased U.S. liquefied natural gas (LNG) exports. U.S. electricity sales are expected to grow by 2.2% in 2025 and 2.4% in 2026, led by the commercial and industrial sectors, particularly data centers. The STEO’s macroeconomic assumptions incorporate the tariffs announced in April and the subsequent 90-day temporary suspensions.

The Labor Department reported that the Producer Price Index for final demand rose 0.9% in July, seasonally adjusted, following no change in June and a 0.4% increase in May. Over the 12-month period ending in July, the PPI advanced 3.3% on an unadjusted basis, the largest annual gain since February 2025. The July increase was driven largely by services, which accounted for roughly three-quarters of the gain, as prices for final demand services rose 1.1% while prices for final demand goods increased 0.7%. Nearly half of the goods prices advance was due to a 1.4% increase in foods along with gains of 0.9% in energy and 0.4% in goods excluding food and energy. Over half of the services prices advance was due to margins for final demand trade services, which jumped 2.0%, while prices for transportation and warehousing services rose 1.0%, and services excluding trade, transportation, and warehousing advanced 0.7%. The core PPI—which excludes food, energy, and trade services—climbed 0.6% in July, the largest monthly increase since March 2022. For the 12 months ended in July, the core PPI rose 2.8%, compared with 2.5% in June.