The U.S. Labor Department announced this week that the closely-watched consumer price index climbed 0.1% in July, the smallest advance in three months. While data showed the index rose 0.3% in June, consumer prices increased just 0.2% for the 12 months ended July 31.

The core index, which excludes food and fuel, also rose 0.1% in July, after a 0.2% jump in June. Over the past three months, core prices increased at a 1.8% annualized rate, down from a 2.6% annualized increase in the three months ended in April. This cooling of price pressures could give Federal Reserve officials reason to hold off on a much-discussed September rate hike. Inflation that runs at 2% has been a stated Fed target.

Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, wrote in a Wall Street Journal opinion piece this week that raising rates prematurely would hurt the U.S. economic recovery. “The U.S. inflation outlook provides no justification for policy tightening at this juncture,” said Kocherlakota.

Looking within July segments, a 5.6% drop in airline fares last month – the largest decline in 20 years – pushed prices down, according to the Labor Department report. Rents and hotel rates moved higher, though, driving prices upward. Gasoline prices also rose 0.9% after increasing 3.4% a month earlier. Food prices were up 0.2%, data showed.