Money | inflation Inflation Is Tamer Than Expected, With an Asterisk 'Core' prices jump 3.1%, which is above expectations By John Johnson Posted Aug 12, 2025 8:10 AM CDT Copied A shopper picks lemons at a Presidente Supermarket, Wednesday, Aug. 6, 2025, in North Miami, Fla. (AP Photo/Marta Lavandier) Tuesday's highly awaited inflation report amid a slew of new tariffs offers a mixed narrative about the economy: Main number: Overall inflation came in tamer than expected in July: Prices rose 2.7% compared to last July, a tick below the Wall Street consensus of 2.8%, reports CNBC. The annual figure of 2.7% is the same as June's, per the AP. 'Core' concern: However, the closely watched measure of core prices—which strips out volatile food and gas prices—rose 3.1%, which is a tick above forecasts of 3% and the fastest annual pace in five months, reports the New York Times. Economists see core prices as a better gauge of underlying trends, notes the Wall Street Journal. Monthly: On a monthly basis, July prices rose 0.2% from June and core prices rose 0.3%, both in line with expectations. Markets: Investors on Wall Street seemed pleased with the new numbers overall, with Dow futures jumping more than 200 points. The odds of a rate cut from the Federal Reserve next month is now 91%, up from 85% before the report's release, per CNBC. Read These Next Analysis sees a historic shift underway in US capitalism. Explosion rocks steel plant near Pittsburgh. Rapper stops his show to scold a mom who brought her baby. A child was reportedly among those shot dead in a Target parking lot. Get breaking news in your inbox. What you need to know, as soon as we know it. Sign up Report an error