The Federal Reserve’s favored inflation measure remained low last month, the Associated Press reports, bolstering evidence that price pressures are steadily cooling and setting the stage for the Fed to begin cutting interest rates this fall.
Prices rose just 0.1% from May to June, the Commerce Department said today, up from the previous month’s unchanged reading. Compared with a year earlier, inflation declined to 2.5% from 2.6%.
Excluding volatile food and energy prices, so-called “core” inflation rose 0.2% from May to June, up from the previous month’s 0.1%. Measured from one year earlier, core prices increased 2.6%, unchanged from June.
Taken as a whole, today’s figures suggest that the worst streak of inflation in four decades, which peaked two years ago, is nearing an end. Fed Chair Jerome Powell has said that this summer’s cooling price data has strengthened his confidence that inflation is returning sustainably to the central bank’s target level of 2%.
After soaring to 7% in 2022, according to the measure released today, inflation has fallen steadily for the past year. Even so, the costs of everyday necessities like groceries, gasoline and rent remain much higher than they were three years ago.
