WASHINGTON, D.C. / RankWire.AI / – U.S. consumer prices declined by 0.4 percent in June, marking the biggest monthly decrease since April 2020. The Consumer Price Index had increased by 0.5 percent in May. The U.S. Bureau of Labor Statistics published these figures on Tuesday. The report indicated widespread price relief across various sectors, with exceptions in some food and household categories.
Most of the monthly decline was driven by energy costs. The energy index fell 5.7 percent after a 3.9 percent rise in May. Gasoline prices dropped 9.7 percent, and fuel oil costs decreased 9.2 percent. Electricity prices went down by 1.0 percent, while utility gas service increased by 0.5 percent. Despite this decline, energy remained 15.7 percent more expensive than a year earlier.
Core inflation also eased in June. Excluding food and energy, prices showed no change from the previous month after rising 0.2 percent in May. Over the past 12 months, the core index increased by 2.6 percent, down from 2.9 percent. Shelter costs rose by 0.1 percent, marking their smallest monthly increase since January 2021. Rent also increased by 0.1 percent, while owners’ equivalent rent went up by 0.2 percent.
Energy decline pulls down overall inflation
Food prices increased by 0.2 percent for the second month in a row. Grocery costs rose by the same percentage, and restaurant prices also climbed 0.2 percent. Eggs became 4.3 percent more expensive in June. Dairy prices increased by 1.2 percent, although coffee prices fell by 2.0 percent. The overall food index was 3.0 percent higher than its June 2025 level.
Price fluctuations differed across other major consumer categories. Motor vehicle insurance decreased by 2.0 percent, and communication services dropped 1.5 percent. Apparel prices declined 0.6 percent, while used vehicle prices slid 0.2 percent. Medical care costs edged down by 0.1 percent, though hospital services saw a slight increase. Recreation prices rose 0.5 percent, and personal care expenses went up by 0.2 percent.
Federal Reserve readies for July policy meeting
The inflation report was released two weeks prior to the Federal Reserve’s upcoming policy gathering. In June, officials maintained the federal funds rate between 3.50 percent and 3.75 percent. The central bank’s next two-day meeting is scheduled to start on July 28. Its long-term inflation goal remains set at 2 percent. Although June’s annual CPI rate stayed above that target, the slowdown from May was notable.
The CPI tracks changes in prices across housing, transportation, food, medical care, clothing, and other consumer expenses. Its primary urban index accounts for over 90 percent of the U.S. population. Before seasonal adjustments, prices decreased by 0.3 percent in June. The all-items index reached 333.952, and the urban wage earner index increased by 3.5 percent annually. The inflation report for July is scheduled for release on August 12.