Consumer Prices Rose 3% In June, Less That May Economists Expected But Fell Slightly From May’s Number
Thursday, July 11, 2024, 12:30 P.M. ET. 2 Minute Read, By Jennifer Hodges: Englebrook Independent News: Charts From The US Bureau Of Labor & Statistics,
WASHINGTON, DC.- Consumer prices fell for the first time since the start of the COVID-19 pandemic, which could result in a long-awaited Federal Reserve interest rate cut, but we shouldn’t bank on that one.
Consumer price increases slowed more than expected in June, giving some evidence that inflation may finally be cooling down. The Consumer Price Index rose 3% year over year in June, slower than the 3.3% annual rate from the month before. From May to June, prices dropped 0.1 percent. This will be the first time the monthly numbers have significantly declined since May 2020.
Thursday’s report from the U.S. Bureau of Labor and Statistics gives some hope that the Federal Reserve may cut interest rates in September, which could bring some relief to voters ahead of the 2024 general election.
In remarks to Congress on Tuesday, Federal Reserve Chairman Jerome Powell expressed concerns that “holding interest rates too high for too long could jeopardize economic growth. Reducing policy restraint too late or too little could unduly weaken economic activity and employment, ” but Powell stopped short of committing to an interest rate cut.
Core inflation, which excludes volatile food and energy prices, climbed just 0.1% from May to June. This would be the slowest monthly growth since January 2021. Gasoline prices fell by 3.8%, and used vehicle prices fell by 1.5%. Shelter costs which have continued to boost inflation for many months, rose by just 0.2%.
Federal Reserve officials are unlikely to announce any interest changes when they meet at the end of July; however, the central bank could signal a pivot at its annual meeting in Wyoming in August.
Although Thursday’s report is encouraging, many Americans are continuing to struggle with their everyday purchases of necessary items. Hopefully, the July Consumer Price Index report will bring another drop in prices.
