US consumer inflation slows in July as energy prices briefly retreat

United States consumer inflation has slowed in July amid a short retreat in energy prices and hopes that the Strait of Hormuz would reopen.

Shipping continues to be severely disrupted since Iran established a maritime “toll booth” in the strait shortly after the US and Israel launched a war against the country in late February.

Consumer inflation rose by 0.1 percent compared with this time last month but was 3.4 percent higher than this time a year ago, according to data released by the Department of Labor’s Bureau of Labor Statistics (BLS) on Wednesday.

Inflation has been largely driven by fuel prices, which, despite a temporary reprieve, are rising. While energy prices declined 1.5 percent from this time last month, they are up 14.7 percent for the year.

“Energy prices have gone down in July because people thought perhaps the blockage of the Strait of Hormuz would end, but it didn’t.  If you look at the past 12 months, energy prices are now much higher than they were a year ago,” Michael Klein, professor of international economic affairs at The Fletcher School at Tufts University, told Al Jazeera.

Brent crude fell 7 percent last week but has jumped this week as hopes that the Strait of Hormuz would reopen faded. Brent crude oil futures rose 0.3 percent to $89.19 per barrel on Wednesday.

Petrol prices dropped 2.9 percent from last month but surged 39.1 percent from a year ago.

At the petrol pump, prices are rising after tumbling 9 cents last week.