The U.S. inflation rate eased to 3.4 percent in July, according to data released Wednesday morning by the Bureau of Labor Statistics. The figure marks the second consecutive monthly decline in the annual rate and comes in line with economist expectations.

The Consumer Price Index for All Urban Consumers rose 0.1 percent on a seasonally adjusted basis in July after falling 0.4 percent in June. On an unadjusted basis, the index increased 3.4 percent over the 12 months ending in July, down from 3.5 percent in the prior period.

Core inflation, which excludes volatile food and energy prices, advanced 0.2 percent for the month and 2.5 percent year over year. Both readings matched forecasts and showed moderation from June levels of 0.0 percent monthly and 2.6 percent annually.

Shelter costs, which account for a large share of the CPI, rose 0.1 percent in July and increased 3.2 percent over the year, down slightly from 3.3 percent previously. Food prices edged up 0.1 percent monthly and 3.0 percent annually. Gasoline prices fell 2.9 percent on the month while rising 24.6 percent year over year.

The report follows a period of cooling price pressures that began after peaks in 2023. Market participants viewed the data as consistent with a gradual return toward the Federal Reserve's 2 percent target, though the pace remains above that level.

The July figures arrive amid ongoing debates over monetary policy and fiscal measures affecting energy and housing markets. Analysts noted that further progress on inflation will depend on developments in those sectors and broader economic growth.

The next CPI release, covering August data, is scheduled for September 11.