In the U.S., topline inflation is down across DPI categories for the fourth month in a row (-0.3% in the all-items index and -0.8% in the all-items less grocery index). This is the first month of deflation in the DPI following four straight months of inflation. Prices remain down year-over-year in the all-items index (-0.7%) and down for the all-items less grocery index (-2.0%). The Adobe DPI for July now includes jewelry, a category which includes men’s and women’s rings, necklaces, watches, and other accessories. The category is up 0.4% in July, consistent with seasonal price changes for this category in the past. Year-over-year, prices are down -1.9% from July 2016. Inflation in July in the U.S. affected travelers purchasing hotels domestically, where inflation is 0.6% month over month. Other categories showing inflation include auto parts (0.7%) and groceries (0.4%). In July, deflation was concentrated in domestic flights (-5.4% MoM) and tablets (-3.2% MoM), and apparel (-1.5%). The sharp decline in flight prices is consistent with the monthly seasonality of the summer travel season as domestic flight prices tend to drop in July. In grocery, inflation in July was driven by staples: in July MoM inflation was highest in dairy products other than cheese and milk (1.5%), breakfast cereals (0.9%), and cheese and related products (0.8%). Across the pond, consumers in the U.K. are facing continued price rises in grocery prices., where food prices are up 0.2% MoM in July and up 2.5% year-over-year for the twelve months ending in July. Twenty states in the U.S. show inflation in July, while 31 states and D.C. show deflation. Price declines for flights across states drove deflation for states that showed overall price declines, while price increases for hotels drove inflation for those states that showed price increases.