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STORY: Americans watch prices climb higher and higher for two years, as the inflation rate hit a forty-year high and gas prices soared.

But now - the first possible sign of relief.

The U.S. Labor Department on Wednesday reported the Consumer Price Index or CPI did not rise in July, but stayed flat since last month's reading.

The net-zero change is largely due to a sharp drop in gasoline prices, while other costs - such as food - continued to rise.

CPI for July showed an eight-point-five percent rise compared with a year ago.

"Zero. Today we received news that our economy had zero percent inflation, in the month of July."

But the zero month-to-month change was significant enough for President Joe Biden to hail it as a mark of his economic stewardship at a White House bill-signing ceremony.

"It underscores the kind of economy we've been building. We're seeing a stronger labor market, where jobs are booming and Americans are working. And we're seeing some signs that inflation may beginning to moderate. That's what happens when you build an economy from the bottom up and the middle out."

Surging consumer prices have prompted a rise in interest rates by the Federal Reserve, which said it wants to see several months of slowing inflation before letting up its plans to push up borrowing costs.

The rate hikes come amid growing fears the U.S. could fall into recession, after the Commerce Department reported two consecutive quarters of negative GDP growth.

But a strong labor market, including a blowout jobs report last week, has made a recession more difficult to assess.

That is likely to keep the Fed on track for further rate hikes.

Rising inflation has undercut Biden's approval rating, although his popularity crept up to 40 percent in a Reuters/Ipsos poll out this week after a string of legislative victories.

Among them, a bill dubbed the Inflation Reduction Act passed by Democrats in the Senate this week, which ratings agency Moody’s told Reuters would bring down inflation in the medium to long term, but will not likely have an impact “this coming year or next year."