Inflation increased in July and moved further away from the Federal Reserve's target rate as central bank policymakers assess the health of the economy amid the president's calls for interest rate cuts.

The Bureau of Labor Statistics on Tuesday said that the consumer price index (CPI) – a broad measure of how much everyday goods like gasoline, groceries and rent cost – rose 0.2% in July compared with last month, while it was up 2.7% from a year ago. 

The monthly figure was in line with the estimate of economists polled by LSEG, while headline was slightly cooler than the 2.8% expected.

So-called core prices, which exclude volatile measurements of gasoline and food to better assess price growth trends, were up 0.3% from the prior month and 3.1% from a year ago. The annual core figure was hotter than economists' expectations of 3%, while the monthly figure was in line with the estimate.

High inflation has created severe financial pressures in recent years for most U.S. households, which are forced to pay more for everyday necessities like food and rent. Price hikes are particularly difficult for lower-income Americans, because they tend to spend more of their already-stretched paychecks on necessities and have less flexibility to save money.

Food prices were flat compared with a month ago, as the food at home index decreased 0.1% and the food away from home index rose 0.3%. Over the last year, the overall food index is up 2.9%, with food at home up 2.2% and food away from home at 3.9%. 

Egg prices declined 3.4% compared with last month, continuing a cooling trend after prices rose rapidly last year due to an avian flu outbreak, as prices are still 16.4% higher than a year ago. The meats, poultry, and fish index was up 0.7% in July and is 4.6% higher than a year ago. The dairy index also rose 0.7% last month and is up 1.5% from last year. The index for fruits and vegetables was unchanged on a monthly basis and is up just 0.2% since last year.

Energy prices decreased 1.1% in July and are down 1.6% compared with a year ago. Gasoline prices were down 2.2% last month and have declined 9.5% from last year.

Housing prices ticked 0.2% higher on a monthly basis in July and are up 3.7% compared with last year. The shelter index was the main driver of the increase in the all-items index.

Transportation costs rose 0.8% in July and are 3.5% higher than a year ago. Air fares were up 4% in July and are just 0.7% higher than a year ago. Auto maintenance and repair costs increased 1% last month and are up 6.5% from last year.

This is a developing story. Please check back for updates.