A shopper carries a Target bag in San Francisco, California, US, on Wednesday, June 10, 2026.
David Paul Morris | Bloomberg | Getty Images
Consumer prices posted their biggest decline in more than six years during June as a sharp swoon in energy prices provided at least temporary relief from this year’s inflation surge, the Bureau of Labor Statistics reported Tuesday.
The consumer price index, a broad measure of costs for goods and services across the U.S. economy, was lower than expected across the board. CPI fell a seasonally adjusted 0.4% for the month, bringing the annual inflation rate down to 3.5%.
Economists surveyed by Dow Jones had been looking for a drop of 0.2% and an inflation rate of 3.8%, following the 4.2% reading in May. The monthly drop in headline inflation was the biggest since April 2020.
Core inflation, which excludes food and energy, was flat on the month, putting the 12-month rate at 2.6%. The consensus forecast was for respective increases of 0.2% and 2.9%, following a 2.9% May level.
The energy index slumped 5.7% in June, though it still surged 15.7% on an annual basis. Gasoline and fuel oil both saw declines of more than 9%.
In addition, services costs, which are closely watched by Federal Reserve policymakers for longer-run inflation trends, moderated significantly. Services excluding energy costs were flat, with shelter rising just 0.1% and transportation services posting a 0.3% decline.
Food prices rose 0.2%, while new vehicles were flat and used cars and trucks saw a 0.2% decline. Apparel prices, which are sensitive to both energy and tariff inputs, fell 0.6%.
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