Inflation Cools Sharply as Gas Prices Plunge
Summary
U.S. inflation dropped sharply in June, mainly because energy and gasoline prices fell a lot. Overall consumer prices went down 0.4 percent in June, marking the biggest monthly decline since April 2020, and inflation slowed to 3.5 percent over the past year.Key Facts
- Consumer prices fell 0.4 percent in June after rising 0.5 percent in May.
- This was the largest one-month drop in inflation since April 2020.
- Annual inflation slowed to 3.5 percent from 4.2 percent the previous month.
- Energy prices fell 5.7 percent, with gasoline prices dropping 9.7 percent in June.
- Despite the drop, gasoline costs remain 26.7 percent higher than June 2025.
- Core inflation, which excludes food and energy, stayed flat in June and rose 2.6 percent yearly.
- Food prices increased 3.0 percent over the past year; shelter costs rose 3.3 percent.
- Lower inflation may ease worries about higher interest rates by the Federal Reserve.
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