U.S. inflation cools to 3.5% in better than expected June report
U.S. inflation decreased by 0.4% in June, for a seasonally adjusted total of 3.5% over the year, driven by rapidly falling energy costs, according to a new report released by the U.S. Bureau of Labor Statistics.
Inflation rose by 0.5% in May before declining 0.4% in June. The dramatic change is the largest one-month shift in prices since April 2020, BLS reported. The overall May inflation rate was 4.2%, showing a dramatic fall in June.
Heather Long, chief economist at Navy Federal, said the June inflation rate cooled “more than expected.” She attributed gas prices to the overall lower rate.
“This was the biggest one-month decline since April 2020,” Long said. “Falling gas prices were the biggest factor.”
Energy prices dropped by 5.7% in June after rising 3.9% in May, 3.8% in April and 10.9% in March, due to the U.S. conflict in Iran. A ceasefire announced in June appeared to slow market tensions in the energy industry.
Overall, energy prices have increasd by 15.7% over the last year, showing a volatile market since the U.S. conflict in Iran started. Gas prices rose by 26.7% over the last 12 month period as well.
The index for food and shelter also increased in June. Food prices rose by 0.2% and shelter prices rose by 0.1%.
Core inflation, which excludes prices for food and energy, eased to 2.6%, down from 2.9% in May.
Long warned that flaring tensions with Iran may mean the cooled inflation numbers are only temporary.
“The renewed war with Iran with almost certainly push inflation back up,” Long said. “This should give the Federal Reserve some time to wait and see for a while.”
Areas Of Smoke
Latest News Stories
Ceasefire impact holds across markets despite varying reports on the Strait of Hormuz
SEC chairman returns ”first principles’ to public markets, supports Texas exchange
Complaint filed against AMA Foundation for racially discriminatory scholarships
Democrats vow to hold Bondi in contempt for refusing Epstein deposition
Commonwealth LNG signs supply deals with five major buyers
Lawmakers hear debate over data centers including revenue, headaches
Illinois quick hits: Madigan corruption appeal to begin Thursday; Attorney General asks lawmakers for additional $15 million;
Deficit watchdog urges Congress to cut more, spend less than Trump’s budget request
Lawmaker pushes sales tax pause on gas as questions cloud ‘fragile’ ceasefire
Groups warn Middle East truce may not ease economic fallout
National ratings outlet says Pennsylvania has most ‘toss up’ midterm races
Regulator: LNG expansion likely to affect rare marsh bird
