WASHINGTON, D.C. / RankWire.AI / – Consumer prices in the United States declined by 0.4 percent in June, marking the steepest 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 many sectors, with some exceptions in food and household categories.
Most of the monthly drop was driven by energy costs. The energy index fell 5.7 percent after rising 3.9 percent in May. Gasoline prices dropped 9.7 percent, and fuel oil costs decreased 9.2 percent. Electricity prices declined by 1.0 percent, although utility gas service rose 0.5 percent. Despite these decreases, energy remained 15.7 percent more expensive than a year earlier.
Core inflation also slowed down in June. Prices excluding food and energy remained unchanged from May, which had seen an increase of 0.2 percent. Over the past 12 months, the core index increased by 2.6 percent, down from 2.9 percent. Shelter costs increased by 0.1 percent, their smallest monthly rise since January 2021. Rent increased 0.1 percent, while owners’ equivalent rent went up 0.2 percent.
Energy decline contributes to lower headline inflation
Food prices increased by 0.2 percent for the second straight month. Grocery costs rose by the same amount, and restaurant prices also grew by 0.2 percent. Eggs became 4.3 percent more costly during June. Dairy prices climbed 1.2 percent, while coffee prices fell 2.0 percent. The overall food index was 3.0 percent higher than its level in June 2025.
Price fluctuations varied across other key consumer sectors. Motor vehicle insurance decreased 2.0 percent, and communication services declined 1.5 percent. Apparel prices dropped 0.6 percent, and used vehicle prices slipped 0.2 percent. Medical care costs edged down 0.1 percent, although hospital services experienced a slight increase. Recreation prices rose by 0.5 percent, and personal care expenses increased by 0.2 percent.
Federal Reserve gears up for July policy meeting
The inflation report was released two weeks ahead of the Federal Reserve’s upcoming policy meeting. Officials maintained the federal funds rate between 3.50 percent and 3.75 percent in June. The next two-day meeting is scheduled to begin on July 28. The Fed’s long-term inflation goal remains at 2 percent. Although June’s annual CPI rate stayed above this target, there was a notable slowdown compared to May.
The CPI tracks price changes in sectors such as housing, transportation, food, medical care, clothing, and other consumer expenses. Its main urban index covers 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, while the urban wage earner index increased by 3.5 percent year-over-year. The inflation report for July is scheduled for release on August 12.