Posted on 07/11/24
| News Source: The Hill
The consumer price index (CPI) dipped to a 3-percent annual increase in June, down from 3.3 in May with the first month of price declines since the pandemic, the Labor Department reported Thursday.
The consumer price index (CPI) dipped to a 3-percent annual increase in June, down from 3.3 in May, the Labor Department reported Thursday, as inflation continues to fall.
The CPI also dropped 0.1 percent in June, marking the second straight month of plateauing or declining prices. Economists expected an annual inflation rate of 3.1 percent, according to consensus projections.
The June decline also marks the third month in a row of declining annual increases in the CPI, a trend mirrored in the personal consumption expenditures (PCE) price index, another key measure of inflation.
Economists greeted the news of retreating prices with enthusiasm.
“Amazing inflation data for June!” former top White House economist Jason Furman posted on social media Thursday morning.
Prices in the CPI’s “core” — which removes the particularly volatile categories of energy and food — advanced 0.1 percent in June after climbing 0.2 percent in May and 0.3 percent in April.
Averaged over the past three months, core CPI has advanced just 1.1 percent, Furman noted.
Food prices increased by 2.2 percent annually in June while energy prices were up 1.1 percent.
Shelter costs, which make up much of the inflation left in the economy, were still elevated at a 5.2-percent annual increase, though they advanced by just 0.2 percent on the month, down from the 0.4 percent increases seen in the previous four months.
The drop in inflation increases the chances that the Federal Reserve will cut interest rates at some point this year, potentially as early as later this month.
Markets have been eagerly awaiting rate cuts by the Fed, which are widely viewed as having a stimulative effect upon the economy.