The numbers: American households paid more in July for goods and services such as gasoline and rent to nudge inflation higher, but not enough to arouse any worries or discourage the Federal Reserve from cutting interest rates again soon.

The consumer price index rose 0.3% in July, the government said Tuesday, matching the forecast of economists polled by MarketWatch.

The increase in the cost of living over the past 12 months climbed to 1.8% from 1.6%, but it’s still well below last year’s peak of 2.9%.

Another closely watched measure of prices that strips out food and energy costs also rose 0.3% last month. The so-called core rate is viewed as a better source of underlying inflationary trends

The yearly increase in the core rate edged up to 2.2% from 2.1%, marking a six-month high.

Read:Trump delays tariffs on Chinese-made laptops, iPhones until after Christmas

What happened: The cost of gasoline rose in July during the height of the summer driving season, but prices have already begun to dip and that’s likely to result in a smaller increase in the CPI in August. Energy prices rose 1.3% last month.

The cost of food was unchanged. Falling grocery prices offset the rising cost of eating out, perhaps an offshoot of higher minimum wage laws that have forced restaurants to pay their workers more.

Read:Cost of eating out is rising a lot faster than buying groceries (and cooking at home)

The prices of rent, medical care, prescription drugs, used vehicles, airline fares, household furnishing and clothing all rose in July. Computer prices surged 2.8%, the biggest monthly increase since the government began tracking them in 2005.

After adjusting for inflation, hourly wages dipped 0.1% last month. They’ve increased a solid 1.3% in the past year, however.

The survey of consumer prices tends to run hotter than the Fed’s preferred inflation barometer known as the price index for personal consumption expenditures. The PCE is up just 1.4% over the past year, well below the Fed’s 2% inflation target.

Big picture: Inflation is low enough to give the Fed more leeway to cut interest rates in 2019 if the central bank grows more worried about the economy. Senior officials are watching closely to see if the expanding U.S. trade conflict with China hurts an already weak global economy and ultimately comes home to roost.

Not every economist is convinced prices will remain low if the U.S. stays out of recession, but the risks for now appear to be low.

What they are saying? “The bulk of the evidence ... indicates underlying inflation is pretty much right at the Fed’s target,” said Stephen Stanley, chief economist at Amherst Pierpont Securities.

“Despite the modest acceleration in core inflation, the Fed is still expected to lower the fed funds rate by a quarter-point two more times in 2019 as global headwinds intensify,” said Scott Anderson, chief economist at Bank of the West.

Market reaction: The Dow Jones Industrial Average DJIA, +1.33% and the S&P 500 index SPX, +1.59% surged in Tuesday trades after President Trump agreed to postpone tariffs on popular consumer goods made in China such as iPhones and video-game consoles.

Stocks have taken a beating this month since the Trump administration announced fresh tariffs on Chinese imports starting in September. The recent political unrest in Hong Kong and fresh uncertainty over Britain’s exit from the European Union have added to the worries.