The rate of inflation likely outpaced growth in Americans’ wages last month, according to projections, even as energy prices moderated slightly.

The Bureau of Labor Statistics is scheduled to release the consumer price index for July at 8:30 a.m. ET. Economists surveyed by Dow Jones expect it will show 3.4% inflation on an annual basis. That would be down from the 3.5% rate in June.

Even that slight decline would keep inflation higher than wage gains. On Friday, the BLS reported that average hourly wages in July grew at a 3.2% clip from a year ago, conjuring fears of potential “stagflation” — when the job market and wage growth stagnate and inflation remains elevated.

Energy prices remain a primary reason for inflation worries.

The CPI jumped to 4.2% in May, as the war with Iran pushed crude oil higher. Those prices moderated after President Donald Trump and other officials said the U.S. was canceling strikes on Iran and was close to a deal to reopen the Strait of Hormuz and halt the war. That didn’t happen, and energy prices have crept up again. On Tuesday, U.S. crude oil prices neared $85 per barrel, while international Brent crude oil rose as high as $90 per barrel, its first time reaching that level this month.

That dynamic has kept gas prices above $4 a gallon.

“Energy prices should again exert a modest disinflationary influence on July CPI, although likely not to the same extent as in June,” economists at PNC Financial wrote in a note on Monday.

Jet fuel prices also remain elevated. Economists at Goldman Sachs forecast that airfare prices rose 2% in July “reflecting passthrough of the rebound in jet fuel prices across July.”

Wall Street and the Federal Reserve will pay close attention to what’s known as “core” CPI, which excludes volatile food and energy prices, and is also expected to rise 0.2% from June. But on a year-ago basis, because the figure is measured against last July’s reading, the rate of core inflation is set to fall slightly to 2.5% from 2.6%.

Still, those levels are too high for several Fed members who help set interest rates.

On Monday, Beth Hammack, the president of the Federal Reserve Bank of Cleveland, said the central bank may need to hike rates multiple times to get inflation back under control.

A quarter-point increase “probably doesn’t do a whole lot for the economy,” she told Yahoo Finance. In recent years, the Fed generally raises rates by 0.25% at a time, except in times of economic crisis such as the 2020 pandemic.

On Tuesday, Hammack was more direct on LinkedIn. “Now is the time to act,” she wrote. Hammack added: “The longer we wait to take action to bring inflation back to our 2 percent objective, the more challenging it will be to bring it back down and the more expensive it will be for the American people.”

The Fed’s next interest rate decision is scheduled for Sept. 16. Other Fed officials who advocated for rate hikes at the central bank’s last meeting agree with Hammack.

“Inflation has been elevated relative to our 2 percent target for more than five years,” Minneapolis Fed President Neel Kashkari wrote in a statement on July 31. Kashkari said that while supply shocks such as Russia’s invasion of Ukraine, Trump’s trade wars and the Iran war are the root causes of inflation, the booming artificial intelligence data center buildout is also causing problems.

Each data center requires enormous amounts of computer memory, leading the small number of manufacturers of that memory — Samsung, SK Hynix, Western Digital and Micron — to dramatically raise prices.

As a result, Apple, Microsoft’s Xbox, Sony’s PlayStation and other consumer electronics makers have hiked the prices of many of their products.

“We have never seen a component price increase this much, this quickly,” Apple told NBC News in a June statement. “We have now reached a point where we need to begin raising prices.”