U.S. inflation runs cooler than forecast, easing pressure on Fed

U.S. inflation decelerated in July by more than expected, reflecting lower energy prices, which may take some pressure off the Federal Reserve to continue aggressively hiking interest rates.

The consumer price index increased 8.5 per cent from a year earlier, cooling from the 9.1 per cent June advance that was the largest in four decades, Labor Department data showed Wednesday. Prices were unchanged from the prior month. A decline in gasoline offset increases in food and shelter costs. 

So-called core CPI, which strips out the more volatile food and energy components, rose 0.3 per cent from June and 5.9 per cent from a year ago. The core and overall measures came in below forecast.