Lower oil and gasoline prices pushed inflation down sharply in June, bringing unexpected relief to American households after months of higher energy costs.
US consumer prices fell 0.4% in June compared with May, marking the steepest monthly decline since April 2020. The annual inflation rate dropped from 4.2% to 3.5%, significantly below forecasts of approximately 3.8%.
Core inflation, which excludes volatile food and energy prices, was also weaker than expected. It remained unchanged during June after rising 0.2% in May, while the annual core inflation rate declined from 2.9% to 2.6%.
The improvement was driven largely by falling oil and gasoline prices, easing pressure on American families following the sharp rise in energy costs caused by the war with Iran.