Consumer Price Index Rose 3.5 Percent Year-Over-Year in June

The consumer price index rose 3.5 percent from a year earlier in June, the Bureau of Labor Statistics reported. The reading marked a decline from the 4.2 percent annual rate recorded in May and followed a 2.4 percent rate in February. Month-over-month, the index fell 0.8 percent, the largest one-month decrease since April 2020.

Declines in the energy index accounted for most of the drop and offset increases in food, utilities and shelter categories. Gasoline prices dropped 9.7 percent from May to June while fuel oil prices fell 9.2 percent, the data showed. Apparel prices declined 0.6 percent.

Core inflation, which excludes food and energy, decreased to 2.6 percent on a yearly basis and remained unchanged from the prior month. Brent crude reached $80 per barrel on Monday after touching a recent low of $67 earlier in July. The national average price for regular gasoline rose to $3.87 per gallon last week, 70 cents above the level one year earlier.

The average number of jobs added to the U.S. economy from April through June was 111,000. The Federal Reserve board is scheduled to meet on 28 and 29 July. Last month the central bank unanimously voted to maintain interest rates.

In testimony before the House Financial Services Committee on Tuesday, new Fed chair Kevin Warsh said the inflation surge of the last five years will be a thing of the past. He defined price stability as a change in prices such that households and businesses do not have to worry about it.

Warsh also described artificial intelligence as perhaps the most significant change in the economy in his adult lifetime and said a material improvement in productivity should lift wages.