Inflation in the United States cooled in June for a third straight month, the Associated Press reports, in a sign that the worst price spike in four decades is steadily fading and may soon usher in interest rate cuts by the Federal Reserve.
Consumer prices declined 0.1% from May to June after having remained flat the previous month, the government reported today. Measured from 12 months earlier, prices were up 3% in June, down from 3.3% in May.
The latest inflation readings could help convince the Fed’s policymakers that inflation is returning to its 2% target. Should inflation remain low through the summer, many economists expect the Fed to begin cutting its benchmark rate in September.
Even as inflation slows, though, the costs of food, rent, health care, and other necessities remain much higher than they were before the pandemic.
Excluding volatile food and energy costs, so-called “core” prices climbed just 0.1% from May to June, below the 0.2% increase in the previous month. Measured from a year ago, core prices rose 3.3% in June, down from 3.4% May. Core prices are thought to provide a particularly telling signal of where inflation is likely headed.
