The US government reported an unexpected slide in consumer prices of 0.1% in July as gasoline costs fell by 4.2%.

The fall comes after eight months of rising consumer prices – a result of soaring oil costs – at an annual rate this year of 4.1%. The core rate for July, excluding food and energy, rose by 0.1% for a second month.

Analysts welcomed the news that the rapid inflation rises earlier this year seem to have been temporary. Says David Sloan of 4Cast: "The inflation scares earlier this year now seem to have corrected as the economy slows."

The findings also cast doubt on whether the US central bank will hike interest rates for a third time this year at its September meeting.

Other reports add to the positive outlook for the US economy. Industrial output edged up by 0.4% in July, the highest rise for three years, while house construction climbed by 8.3%.

Data sourced from: BBC Online Business News (UK); additional content by WARC staff