The annual inflation rate fell to 3 percent in June, according to the consumer price index (CPI), falling from a 4 percent annual rate May after prices on the whole rose just 0.2 percent last month.
After peaking at 9.1 percent in June 2022, the annual inflation rate has fallen sharply over the past year.
The combination of rapid Federal Reserve rate hikes, unsnarled supply lines and a nosedive in energy prices have eased some pressure on household budgets. While prices are still rising, the slower rate is cause for optimism that the worst of inflation is behind the U.S.
“Prices for everything from eggs to used cars dropped in June, causing a big deflation in inflation. By one measure, inflation is just one-third of what it was a year ago, said Robert Frick, corporate economist with Navy Federal Credit Union, in a Wednesday analysis.
“However, this is not yet a turning point,” Frick continued. “Core inflation will prove tougher to beat.”
The overall inflation rate is within striking distance of the Fed’s goal. But “core” inflation — which strips out food and energy prices — is at an annual rate of 4.8 percent, still well above the bank’s target.
We have more on today’s inflation data at TheHill.com
