US consumer prices cooled slightly in July as the annualized inflation rate dipped down to 3.4%, though prices still remain higher than levels seen before the war with Iran.

Though inflation decreased 0.7 percentage points in June during a brief ceasefire between the US and Iran that brought energy prices down, consumer prices have remained elevated. Price increases hit a three-year high in May, with annual inflation reaching 4.2%.

Core inflation – a key measure that excludes volatile energy and food prices – increased slightly to 2.5% compared with last year, and increased at a modest 0.2% since last month.

The overall index for food and services, including shelter, transportation and medical care, rose 3% each compared with last year, though grocery prices fell slightly. The price of lettuce fell 16% over the last year as it continues to be linked to the cyclosporiasis outbreak.