Inflation is cooling thanks to gas prices, but many things still cost a lot more

A driver pumps gas at a Gulf gas station in Lynnfield, Mass., on July 19. Gasoline prices are dropping, which is helping bring down inflation. But the cost of many other things are still climbing. (Joseph Prezioso/AFP via Getty Images)

When it comes to inflation, the good news is that gas prices are dropping. The bad news is that other costs continue to climb faster than wages, and that's putting a strain on many family budgets across the country.

The Labor Department reported Wednesday that annual inflation dipped to 8.5% in July, from 9.1% the month before, thanks in part to a steep drop in gasoline prices.