Prices in US fell in June for the first time since the start of the pandemic

By Alicia Wallace | CNN

US consumer prices did something in June that they haven’t done since the early part of the pandemic: They fell.

Consumer prices dropped 0.1% on a monthly basis, helping to bring the annual rate of inflation to 3% from 3.3% in May, according to the Bureau of Labor Statistics’ latest Consumer Price Index report.

Falling gas prices as well as a drop in new and used car prices helped to usher in the first month-on-month decline since May 2020, BLS data showed. On an annual basis, consumer prices are increasing at their slowest pace since June 2023, matching the lowest annual rate since early 2021.

The better-than-expected inflation report further bolstered hopes that a Federal Reserve rate cut could come sooner than later and help make borrowing money less expensive. Interest rates have been planted for months at a 23-year high as a result of the central bank’s inflation-fighting campaign.

“With another good CPI print under their belt, the window is open for the Federal Reserve to cut interest rates as early as September, and potentially again in December, assuming the inflation data continues to cooperate,” Skyler Weinand, chief investment officer at Regan Capital, wrote Thursday in a note to clients.

Economists were expecting a 0.1% monthly increase and an annual gain of 3.1%, according to FactSet consensus estimates.