US prices rose 3.4% in the year to July, slightly lower than the 3.5% in the year to June, new figures show.
Month to month, inflation rose 0.1%, mainly due to an increase in housing costs, the Bureau of Labor Statistics said. Even small moves in rent can lift the overall headline figure as it makes up a large share of household spending.
Food prices rose only slightly in July and at a slower rate than in June, while energy prices fell, offering some relief for consumers.
Prices excluding food and energy rose 0.2% after staying flat in June, with medical care and airline tickets becoming a bit more expensive and car insurance falling.