The Labor Department reports on U.S. consumer prices in July. The report will be released at 8:30 a.m. Eastern time.

PRICE MODERATION: The expectation is that consumer prices rose a slight 0.1 percent in July, according to a survey of economists by data firm FactSet.

PRICE BLIP: In June, prices rose 0.3 percent, only a slight slowdown from May, when they had jumped 0.4 percent. About two-thirds of the June increase reflected the largest rise in gasoline prices in a year.

Core prices, which exclude volatile food and energy, barely rose in in June, inching up just 0.1 percent. Over the past 12 months, core prices have risen 1.9 percent, a sign of moderate inflation.

Analysts believe overall prices will moderate in July in part because gasoline prices have been declining. AAA reports that the nationwide average for a gallon of regular gasoline dipped to $3.45 on Monday, down 13 cents in the past month.

Gas prices are also lower than a year ago, when a gallon of regular cost $3.54. That fall in gasoline prices is one reason for the optimism of economists that consumer spending will show solid gains in coming months. A drop in gasoline prices means consumers will have more to spend on other items.

The Labor Department reported last week that its producer price index rose just 0.1 percent in July following a 0.4 percent gain in June. This index measures the cost of goods and services before they reach consumers.

The Federal Reserve strives to achieve a 2 percent target for inflation. Until recently, price increases by its favorite inflation gauge were rising around 1 percent, well below the Fed's target. While this inflation gauge showed a 12-month gain of 1.6 percent in June, that remains comfortably below the Fed's target and is giving the central bank the leeway to keep interest rates at record lows to boost the economy.

Fed Chair Janet Yellen has continued to stress that while there have been improvements in the unemployment rate, many indicators of the labor market remain weak. She has cited still-high levels of people out of work six months or longer, large numbers of people being forced to work part-time who would like full-time work and persistent weak wage growth.

Yellen will deliver the keynote address at an annual conference sponsored by the Kansas City Federal Reserve Bank in Jackson Hole, Wyoming, on Friday.

Financial markets will watch those comments closely for any hints that Yellen is considering moving up the timing for the Fed's first rate hike since the recession. Many economists still believe that the Fed will not start boosting its key short-term interest rate, which has been at a record low near zero since late 2008, until the middle of next year.