Falling energy prices drove down inflation in June, offering Federal Reserve’s policymakers and would-be homebuyers a welcome reprieve after May’s dramatic surge.
Beating economists’ expectations, overall prices increased by 3.5% in the 12 months through June, retreating from the previous month’s three-year-high of 4.2%, according to the U.S. Labor Department’s Consumer Price Index (CPI) data released Tuesday.
Total prices actually fell 0.4% in June compared to May, driven by a sharp decline in energy prices, as a ceasefire between the U.S. and Iran sent global oil prices lower. Hostilities have resumed in recent days, potentially undoing that trend.
The energy index plunged 5.7% on a monthly basis in June after rising 3.9% in May, more than offsetting increases in other indexes, including the index for food, which ticked up 0.2% over the month.
Core inflation, which strips out volatile food and energy costs, cooled to 2.6%.
This is a developing story. Please check back for updates.
Snejana Farberov is a reporter at Realtor.com covering the U.S. housing market and the latest domestic real estate trends. She has worked as a general assignment journalist in New York City and Long Island for 16 years, writing for New York Post, Daily Mail, and News 12. Snejana earned bachelor’s degrees in journalism and Italian from St. John’s University, followed by a master’s degree from Columbia University School of Journalism.
