U.S. inflation cooled in June as gas prices fell and core prices flattened.
Why it matters: The report can shift expectations for Federal Reserve policy, bond yields and stock trading. It also gives companies a fresh read on pricing power and consumer demand.
- The Consumer Price Index fell 0.4% in June after rising 0.5% in May.
- Year over year, CPI rose 3.5% and core CPI rose 2.6%.
- The energy index fell 5.7% in June, with gasoline costs doing much of the work.
- AP said clothes and used-car prices also fell, easing underlying inflation more than economists expected.
The Bureau of Labor Statistics said the Consumer Price Index for All Urban Consumers fell 0.4% in June on a seasonally adjusted basis after rising 0.5% in May.
The softer reading was driven mainly by a 5.7% drop in the energy index, with gasoline prices falling enough to offset gains elsewhere in the basket. The core CPI, which excludes food and energy, was unchanged on the month and up 2.6% from a year earlier.
The AP said gas, clothes and used-car prices fell, providing relief to consumers and easing underlying inflation pressures more than economists expected. Reuters said the report reduced anxiety in markets that had worried inflation could force additional Federal Reserve rate increases later in 2026.
That still leaves the policy debate open. In its July 2026 Monetary Policy Report, the Fed said inflation remained elevated relative to its 2% goal and pointed to energy as a continuing source of price pressure.
The June CPI report was released July 14, and the next CPI release in the BLS archive is scheduled for Aug. 12, covering July data.
By the numbers
- 0.4% - June CPI-U decline from May
- 3.5% - June CPI-U increase from a year earlier
- 5.7% - June decline in the energy index
Yes, but: One cooler month does not resolve the broader inflation debate, and the Fed still describes inflation as above target.
What's next: The next scheduled CPI release is Aug. 12, 2026, for July inflation data.