Inflation Eased to 3% in June, Slowing for the 12th Month
The U.S. Bureau of Labor Statistics (BLS) reported that the consumer price index increased 3% year over year in June, falling to its lowest rate in more than two years. The latest reading marked inflation’s deceleration for the 12th consecutive month, an encouraging sign for Americans and the Federal Reserve (Fed).
Inflation is slowing across a range of products and services; it rose on a monthly basis of 0.2% in June. Moreover, Americans are witnessing a welcome and long-awaited decrease in service prices, excluding energy-related costs. Shelter was the largest contributor to the monthly increase. Shelter costs are still climbing, increasing 0.4% over the month after rising 0.6% in May. This is noteworthy because home prices have significantly contributed to rising inflation and are not coming down.
“The Fed will embrace this [month’s] report as validation that their policies are having the desired effect—inflation has fallen while growth has not yet stalled.”
- George Mateyo, chief investment officer at Key Private Bank
What’s Next?
Despite the unexpectedly positive BLS report, the Fed is likely undeterred from proceeding with the anticipated interest rate hike this month. However, it does cast doubt on the necessity of further rate hikes in the future.
Individuals should continue to monitor the economy and associated inflation trends, adjusting their financial habits accordingly. Check with your manager for financial and mental wellness benefits and related resources.
We will keep you updated with any notable changes.
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