Inflation unexpectedly falls to 3% in June

by Admin
Inflation unexpectedly falls to 3% in June

Inflation cooled more than expected in June, a welcome sign for the Federal Reserve even as prices remained uncomfortably high for millions of Americans.

The Labor Department 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.

Both of those figures are lower than the 0.1% monthly increase and 3.1% headline gain forecast by LSEG economists.

Another data point that measures underlying inflationary pressures within the economy also moderated last month. So-called core prices, which exclude the more volatile measurements of gasoline and food in order to better assess price growth trends, increased 0.1% in June. From the same time last year, the gauge climbed 3.3% — the lowest reading since April 2021.

Altogether, the report indicates that inflation is loosening its stranglehold on the U.S. economy, though prices still remain above the Fed’s 2% target.

The softer-than-expected report comes as Federal Reserve policymakers look for evidence that high inflation has been successfully tamed as they contemplate when to start cutting interest rates.

Stock futures surged on Thursday morning and bond yields tumbled as the report fueled hopes that the central bank could cut interest rates as soon as September. 

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 39721.36 +429.39 +1.09%
I:COMP NASDAQ COMPOSITE INDEX 18647.448214 +218.16 +1.18%
SP500 S&P 500 5633.91 +56.93 +1.02%

This is a developing story. Please check back for updates.

Source Link

You may also like

Leave a Comment

This website uses cookies. By continuing to use this site, you accept our use of cookies.