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Consumers are finally catching a break with a cooldown from historically high inflation rates. But prices for certain common expenses — including food and rent — just keep on soaring.

Consumer prices rose 8.5% on an annual basis in July, according to new data released Wednesday by the Bureau of Labor Statistics (BLS). Declines in gasoline prices and airfare are part of the reason for the improvement over the 9.1% annual growth rate in June, but essentials like groceries and rent are still getting more expensive.

Grocery prices have risen 13.1% over the past year, the BLS said. That’s the largest annual increase since March 1979.

Some supermarket staples have seen even bigger spikes. The price of flour soared 22.7% over the past year, while breakfast cereal is 16.4% more expensive than it was in July 2021. Lunchmeat prices have surged 18%, and prices for chicken and coffee are up 17.6% and 20.3%, respectively.

Rent is another expense that keeps getting more costly. Rent prices rose 0.7% from June to July, and they're up 6.3% on an annual basis nationwide. Rent has also spiked significantly higher in popular cities like Miami and Austin.

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Core inflation is falling

The Federal Reserve, which sets monetary policy and has been raising interest rates in the hopes of slowing price increases for consumers, likes to see inflation at about 2%. So even as Wednesday's data shows inflation rates are cooling down, they remain abnormally high in the grand scheme.

One reason Wednesday’s data was greeted as positive news is that core inflation — which is a measure of price increases that excludes the food and energy categories, which tend to be volatile — remained steady at 5.9% year-over-year in both June and July. Core prices rose just 0.3% between June and July, compared to 0.7% between May and June.

That’s good news, experts say. “The slowdown in core goods prices is consistent with the drop in shipping prices and other signs of easing of supply chain pressures over the last few months,” analysts from Bank of America wrote in a Wednesday note.

“The July CPI report is a welcome relief for the economy,” the analysts wrote.

Investors certainly seem to like the news too: Stocks jumped on Wednesday morning after the release of the latest inflation numbers.

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