Inflation moderated more than expected in June as a decline in gasoline prices offset an uptick in food and rent, according to new Labor Department data.
Inflation eased again in June as a sharp drop in gas prices helped to offset other increases, providing some relief to consumers.
The U.S. Department of Labor on Thursday said that the consumer price index (CPI), a broad measure of how much everyday goods like gasoline, groceries and rent cost, dropped 0.1% in June from the previous month. It marked the first monthly decline since May 2020. Prices remain up 3% from the same time last year.
"June CPI data was lower than expected, and highlights the fact that the disinflationary trend is continuing," said Sonu Varghese, global macro strategist at Carson Group.
Here is a breakdown of where Americans are seeing prices rising and falling the fastest.
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Housing costs were once again a major contributor to inflation last month — although there are signs they are also starting to cool. Rent costs rose 0.2% for the month and are up 5.2% from the same time last year. It marked the slowest monthly pace since August 2021.
Rising rents are concerning because higher housing costs most directly and acutely affect household budgets.
Another data point that measures how much homeowners would pay in equivalent rent if they had not bought their home also climbed by 0.3% from the previous month.
"Shelter costs have been a persistent inflation trouble spot, which is a double-whammy as it is also the most heavily weighted component in the CPI — as it is in most household budgets," said Greg McBride, chief financial analyst at Bankrate. "A long-awaited easing of shelter inflation has yet to materialize and 2% inflation will remain elusive as long as this continues to be the case."
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Food has been one of the most visceral reminders of inflation for many Americans, who saw prices once again tick higher in June.
The cost of food climbed 0.2% last month and is up 2.2% from the same time last year. The food-away-from-home index rose sharply by 0.4%, while the cost of groceries inched 0.1% higher.
Groceries cost 1.1% more than they did last year, and when compared with January 2021 — before the inflation crisis began — prices are up more than 21%.
Consumers paid more for a number of basics, including butter (2.6%), bread (0.7), pork chops (3.1%), fresh fish and seafood (2.1%), milk (0.8%), citrus fruits (3.2%), canned fruits (1.3%) and coffee (0.5%).
"Grocery prices continue to rise month-to-month, making things difficult for lower-income households who spend a larger percentage of their income on food," said Jeffrey Roach, chief economist at LPL Financial.
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Some prices did fall last month, including for breakfast cereal, rice, beef steak, chicken and vegetables like lettuce and tomatoes.
Energy prices fell in June for the second straight month, easing some of the financial pressure that many families are enduring. Prices fell 2% during the month, thanks to a 3.8% decline in gasoline.
The price of propane, kerosene and firewood also dropped 1.2% in June, while fuel oil costs decreased by 2.4%.
There was some good news for Americans looking to buy a car in June.
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New car and truck prices fell again last month, dropping 0.2%. Prices are down 0.9% from the same time last year.
The cost of used vehicles — which were a major component of the inflation spike in 2022 — also fell in June, tumbling 1.5%. From a year ago, prices are down 10.1%.
But there is another growing problem for car owners: insurance costs. Auto insurance premiums jumped 0.9% in June; prices are up a stunning 19.5% from the same time last year.
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Airline tickets fell again in June, dropping 5%.
The cost of tickets is down about 5.1% when compared with last year, according to the data.
