WASHINGTON—Inflation eased last month as energy prices tumbled, raising hopes that a surge in prices increases may have peaked.
According to Commerce Department report Friday that is closely watched by the Federal Reserve, consumer prices rose 6.3 percent in July from a year earlier after posting an annual increase of 6.8 percent in June, biggest jump since 1982. Energy prices made the difference in July: They dropped last month after surging in June.
So-called core inflation, which excludes volatile food and energy prices, rose 4.6 percent last month from a year earlier after rising 4.8 percent in June. The drop—along with a reduction in the Labor Department’s consumer price index last month—suggests that inflationary pressures may be starting to ease….