WASHINGTON, D.C. / RankWire.AI / – In June, US consumer prices decreased by 0.4 percent, marking the most significant monthly decline since April 2020. The Consumer Price Index had previously risen by 0.5 percent in May. Yearly inflation slowed from 4.2 percent to 3.5 percent. The U.S. Bureau of Labor Statistics published these figures on Tuesday. The report indicated widespread price relief across many categories, excluding some food and household sectors.
Energy expenses primarily drove the monthly decrease. The energy index declined 5.7 percent after rising 3.9 percent in May. Gasoline prices fell 9.7 percent, while fuel oil costs decreased 9.2 percent. Electricity prices dropped 1.0 percent, although utility gas service increased 0.5 percent. Despite this decline, energy remained 15.7 percent more costly than a year earlier.
Core inflation also eased in June. Prices excluding food and energy showed no change from the previous month after a 0.2 percent rise in May. Over the past year, the core index increased by 2.6 percent, down from 2.9 percent. Shelter costs grew by 0.1 percent, their smallest monthly rise since January 2021. Rent increased 0.1 percent, and owners’ equivalent rent went up 0.2 percent.
Energy decline helps reduce overall inflation
Food prices increased by 0.2 percent for the second month in a row. Grocery costs rose by the same margin, and restaurant prices also gained 0.2 percent. Eggs became 4.3 percent more expensive in June. Dairy prices increased 1.2 percent, but coffee prices fell 2.0 percent. Overall, the food index was 3.0 percent higher than in June 2025.
Price fluctuations differed across key consumer categories. Motor vehicle insurance declined 2.0 percent, and communication services dropped 1.5 percent. Apparel prices fell by 0.6 percent, while used vehicle prices slid 0.2 percent. Medical care costs edged down 0.1 percent, although hospital services saw a slight increase. Recreation prices rose 0.5 percent, and personal care expenses increased by 0.2 percent.
Federal Reserve gears up for July policy meeting
The inflation data was released two weeks ahead of the Federal Reserve’s upcoming policy session. In June, officials kept the federal funds rate within the range of 3.50 percent to 3.75 percent. The central bank’s two-day meeting is scheduled to begin on July 28. Its long-term inflation target remains 2 percent. Although the annual CPI rate in June remained above this level, it showed a significant slowdown from May.
The CPI tracks price changes across sectors such as housing, transportation, food, medical care, clothing, and other consumer expenses. Its primary urban index covers more than 90 percent of the US population. Before seasonal adjustments, prices fell 0.3 percent in June. The all-items index reached 333.952, while the urban wage earner index increased by 3.5 percent annually. The inflation report for July is set to be released on August 12.