J Studios Inflation cooled for a fourth straight month in July, dropping to its lowest level since March 2021. According to the Bureau of Labor Statistics, the headline figure for the Consumer Price Index fell to 2.9% year-over-year, lower than the expected 3.0% growth. Additionally, core CPI cooled to 3.2% as expected. Compared to last month, headline and core prices were up 0.2%. Both readings were consistent with their respective forecasts. Here is the introduction from the BLS summary, which leads with the seasonally adjusted monthly data: The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent on a seasonally adjusted basis, after declining 0.1 percent in June, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.9 percent before seasonal adjustment.The index for shelter rose 0.4 percent in July, accounting for nearly 90 percent of the monthly increase in the all items index. The energy index was unchanged over the month, after declining in the two preceding months. The index for food increased 0.2 percent in July, as it did in June. The food away from home index rose 0.2 percent over the month, and the food at home index increased 0.1 percent.The index for all items less food and energy rose 0.2 percent in July, after rising 0.1 percent the preceding month. Indexes which increased in July include shelter, motor vehicle insurance, household furnishings and operations, education, recreation, and personal care. The indexes for used cars and trucks, medical care, airline fares, and apparel were among those that decreased over the month.The all items index rose 2.9 percent for the 12 months ending July, the smallest 12-month increase since March 2021. The all items less food and energy index rose 3.2 percent over the last 12 months and was the smallest 12-month increase in that index since April 2021. The energy index increased 1.1 percent for the 12 months ending July. The food index increased 2.2 percent over the last year. The first chart is an overlay of headline CPI and core CPI (excludes Food and Energy) since the turn of the century. The highlighted two percent level is the Federal Reserve’s target inflation rate. In July, headline CPI slowed for a fourth straight month to 2.9%, its lowest level since March 2021. Additionally, core CPI cooled to its 3.2%, its lowest level since April 2021. The next chart shows both series since 1957, the year the government first began tracking core inflation. In the wake of the Great Recession, two percent has been the Fed’s target for core inflation. However, at their December 2012 FOMC meeting, the inflation ceiling was raised to 2.5% while their accommodative measures (low Fed Funds Rate and quantitative easing) were in place. They have since reverted to the 2% target in their various FOMC documents. The COVID-19 pandemic helped launch inflation into its highest levels since the 1980s. Federal Reserve policy, which in recent history has focused on core inflation measured by the core PCE Price Index, will see that the more familiar core PCE is currently above the target range of 2%. The Fed has been in a tightening cycle to tackle high inflation, among other things. Inflation has been easing, but it will it be enough to curb a recession? Original Post Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.