Inflation Growth Slows
Annual inflation in the US rose 3% in June, marking the smallest year-over-year rate increase since March 2021, according to government data released yesterday. On a monthly basis, inflation grew 0.2% in June. Both figures are lower than analyst expectations of 3.1% growth year-over-year and 0.3% growth month-over-month.
The consumer price index, which measures price changes for a basket of goods and services, rose 4.8% year-over-year when excluding volatile food and energy prices. The rise in inflation is partly due to high housing costs, which were offset by declines in the prices of used cars and trucks, airline fares, and food items such as bacon, milk, and eggs. See a detailed breakout of prices for various commodities here.
The consumer price index has cooled since peaking at a 9.1% year-over-year growth rate in June 2022 (see historical chart) but remains above the Federal Reserve's 2% annual target. Fed officials are expected to resume raising interest rates at their upcoming two-day meeting July 25-26.