U.S.: Inflation fell to 3.4% in July, less than in June

WHAT HAPPENED

U.S. annual inflation fell from 3.5% in June to 3.4% in July: something that cost $100 a year ago now costs $103.40 today. For the month, prices rose 0.1%; gasoline fell 1.5%, but housing increased 3.2% annually.

WHY IT MATTERS

Prices are cooling down, giving the Federal Reserve more room to lower its interest rate in September. This could make loans, mortgages, and credit cards cheaper. Construction, automobiles, and credit purchases tend to feel it first; meanwhile, housing continues to pressure spending.

AND FOR YOUR PORTFOLIO

For a long-term portfolio, lower rates can help businesses and families that rely on credit. However, the average wage is rising 3.2% annually, less than prices: money is still losing some purchasing power, although gasoline provided some relief.