New data from the Bureau of Labor Statistics shows inflation dropped for the second consecutive month, offering some relief for consumers even as many households and businesses continue to face higher costs.

The national inflation rate was 3.4% in July, down from 3.5% in June and 4.2% in May.

Despite the declines, inflation remains above the Federal Reserve's target rate of 2% and higher than levels seen before the war in Iran began earlier this year.

"Whether the prices are going up or down, we have to keep the quality stable for everybody. (Customers) will always come back if you're doing the right thing," said Ginter Senfeldas, co-owner of Baltic Bites, a Lithuanian food truck that stopped at NC State's Centennial Campus on Wednesday.

Senfeldas said the business has worked to maintain quality while facing higher expenses.

"We took all the recipes from back home and wanted to bring something new to this country," he said.

He said costs have increased across multiple parts of the business, from fuel to plasticware to ingredients and commissary.

"We are trying to absorb as much as we can so we don't put it on our customers. But we're definitely seeing inflation," Senfeldas shared.

Energy prices rose nearly 15% from July 2025 to July 2026. Gas prices increased nearly 25% year-over-year, a rise tied in part to the closure of the Strait of Hormuz.

According to AAA, the average price of a gallon of gas in North Carolina is $3.68. While that remains below the national average, it is more than 80 cents higher than a year ago.

"The price of gas is unbelievable. I never thought that the prices of everyday things would have reached this kind of price," said Raleigh resident Kathyann Law.

Law said her family has adjusted its shopping habits to stretch its budget.

"My husband makes sure to go to Harris Teeter on Friday to get quadruple points so that he could (save on) gas," Law said.

Economists say consumer spending has remained relatively steady despite elevated prices.

"Overall, the US economy is doing pretty well. You see that measures of spending are pretty stable, and people are reluctantly spending money on these high-priced things," said Aeimit Lakdawala, an Associate Professor of Economics at Wake Forest University.

Core inflation, which excludes food and energy costs, was 2.5%, also down back-to-back months.

"When you look at core inflation ... there is some good news that that trend seems to be going towards 2%," Lakdawala said.

The Federal Reserve is set to meet again in mid-September when policymakers will review the latest economic data and consider any changes to interest rates.

"What (the Federal Reserve is) trying to do is trying to balance the two sides of the economy. They're trying to keep the labor market strong so that job growth is strong and people have the income that they need, but they are of course also worried about inflation," Lakdawala said.