WASHINGTON — U.S. consumer prices increased moderately in July, according to the latest inflation data released Wednesday, giving financial markets a new indication of where the American economy may be heading.

The Consumer Price Index is forecast to rise 0.1% for July, while prices are expected to be 3.4% higher than a year earlier. Core consumer prices, which exclude food and energy, are projected to increase 0.2% for the month and 2.5% annually.

The report comes at an important moment for the Federal Reserve, with investors closely monitoring inflation before making expectations about future interest-rate decisions.

Moderating gasoline prices have helped limit some pressure on household budgets, while businesses continue to watch labor costs and other expenses.

For American consumers, inflation remains an important economic issue because persistent price increases can affect housing, groceries, transportation and everyday household spending.

Financial markets are also expected to react to the inflation figures, particularly if the data differs significantly from economists' expectations.

A weaker inflation reading could strengthen expectations for easier monetary policy, while unexpectedly strong price growth could make the Federal Reserve more cautious.

The July inflation report therefore gives investors and households another important snapshot of the U.S. economy as policymakers weigh the next stage of monetary policy.