US inflation saw another dramatic slowdown in June
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- US inflation is still tumbling, per new data out Wednesday.
- The Consumer Price Index rose by 3.0% year over year in June, below the change in May.
- That's one good point for the Fed and the economy.
June held more good news for Americans' wallets, as inflation yet again dramatically cooled.
That's based on new Consumer Price Index data from the Bureau of Labor Statistics on Wednesday, which is one measure of inflation. The Consumer Price Index, or CPI, rose by 3.0% in June from a year prior. That suggests another month of cooling inflation, after the unadjusted year-over-year change in May was 4.0%.
June's change was not too far off the year-over-year CPI forecast. Inflation was expected to continue to tumble, as it has been this whole year, with a forecast of 3.1%. Inflation, as measured by year-over-year changes in CPI, had been broadly rising since the second half of 2020 before peaking in June 2022 at 9.1%. However, the year-over-year CPI has tumbled every month since then, and the new data means 12 months of falling inflation.
CPI ticked up from May to June by 0.2%, according to seasonally adjusted data. The month-over-month percent change was expected to be more than the percent change in May, from a month-over-month increase of 0.1% in May to a month-over-month increase of 0.3% in June.
The uptick in month-over-month CPI had contributed to real wages ticking up, according to a news release from the Bureau of Labor Statistics on Wednesday. Real average hourly earnings rose by 0.2% month over month in June.
Core CPI, which excludes food and energy, climbed by 4.8% from June 2022 to this past June, per unadjusted data. That's less than the forecasted increase of 5.0%, and less than the year-over-year growth in May, which was 5.3%.
Core CPI edged up by 0.2% from May to June per seasonally adjusted data, less than the forecast of 0.3% and the smallest month-over-month growth since August 2021. The latest month-over-month percent change was also below the 0.4% growth seen in each month from March to May.
The index for shelter continues to cool slightly but is still high, with a year-over-year increase of 7.8% in June. According to seasonally adjusted data, this index climbed by 0.4% from May to June, below the 0.6% gain from April to May.
"The index for shelter was the largest contributor to the monthly all items increase, accounting for over 70 percent of the increase," the news release from BLS about the latest CPI data stated.
The index for food overall soared by 5.7% from the same time a year ago in June. The index for energy saw a massive drop year over year, falling by 16.7%. Specifically, fuel oil plunged by 36.6% year over year.
While inflation is still falling in the US, it's still more than the Fed's 2% target, at least by the overall year-over-year CPI measure. The Federal Reserve didn't raise interest rates in June after 10 straight hikes, and the next Federal Open Market Committee meeting is in two weeks.
"My colleagues and I understand the hardship that high inflation is causing, and we remain strongly committed to bringing inflation back down to our 2% goal," Federal Reserve Chair Jerome Powell said in June for the Semiannual Monetary Policy Report to the Congress. "Price stability is the responsibility of the Federal Reserve, and without it, the economy does not work for anyone. In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all."
This is a developing story. Please check back for updates.