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11/07/24
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Monthly CPI in US Declines for First Time In 4 Years
In June, consumer prices in the U.S. dropped for the first time in 4 years amid moderating rents and cheaper gasoline, firmly putting disinflation back on target and pushing the Federal Reserve another step closer to reducing interest rates in Sept.
The second consecutive month of benign consumer prices reported on Thursday by the Labor Department may help to bolster the U.S. central bank officials’ confidence that inflation was easing after rising in the first quarter.
The report also showed a gauge of underlying inflation recording the smallest rise on a monthly basis since Aug. 2021. Financial markets saw a high chance of the Fed beginning its cutting cycle in Sept.
According to the Labor Department’s Bureau of Labor Statistics, the consumer price index dropped 0.1% in June, the first decline since May 2020, after not changing in May.
The CPI was pulled lower by a 3.8% drop in gasoline prices, which came after May’s decrease of 3.6%. After rising 0.4% in May, shelter costs, including rents, increased by 0.2%.
Food prices were 0.2% higher after in May inching up 0.1%. Grocery store prices edged up 0.1%, with increases in meat, dairy products, eggs, and fish offset by drops in the costs of cereals as well as fruits and vegetables.
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