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Inflation cools to 3.5% in June as energy prices ease

June CPI fell 0.8% month over month, led by drops in gasoline and fuel oil, even as oil prices have risen again after renewed US and Iran tensions.

Reported · Written up by our desk · Trade & Tariffs

Inflation in the United States eased to a 3.5% annual rate in June, according to data cited by The Guardian Economics, with the pullback linked to lower energy prices during a brief US-Iran ceasefire period.

The June CPI reading marked a month over month decline of 0.8%, the largest one month drop since April 2020, driven most by declines in the energy index. Gasoline prices fell 9.7% from May to June, while fuel oil, which includes diesel and kerosene, dropped 9.2%, partially offset by increases in other categories such as food, utilities, and shelter.

Core inflation, which excludes volatile energy and food and is closely watched by the Federal Reserve, edged down slightly to 2.6% year over year and was flat from the prior month.

Despite the June relief, renewed strikes between the US and Iran have pushed oil higher, and The Guardian Economics noted that Brent crude hit $80 on Monday after trading near $67 earlier in July. Gas prices also rose, with the national average for a regular gallon increasing to $3.87 last week, and Delta said in its latest quarterly results that it expected high airfares to persist and had passed 60% of extra fuel costs to consumers.

Latest closeWTI crude $78.04 ▲9.3%|Brent $83.15 ▲9.4%|Gasoline (RBOB) $2.974 ▼0.4%

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