US consumer prices edged up tiny 0.1 percent in July; airline fares fell sharply

Consumer inflation slowed in July following two months of slightly faster gains. The slowdown reflected in part the biggest drop in airline fares in nearly two decades.

The Labor Department says its consumer price index rose 0.1 percent in July following gains of 0.3 percent in June and 0.4 percent in May.

Energy costs edged up 0.1 percent but still remain 14.8 percent below the level a year ago. Food costs rose a modest 0.2 percent despite another big jump in the price of eggs, reflecting further fallout from the avian flu outbreak.

Over the past 12 months, consumer prices are up just 0.2 percent. Core inflation, which excludes volatile energy and food, has risen a modest 1.8 percent. Both figures show inflation pressures remain modest.