US Consumer Prices Rose Modestly In June; Core Inflation Slowing

• S. consumer prices rose modestly in June and registered their smallest annual increase in more than two years as inflation continued to subside, but probably not fast enough to discourage the Federal Reserve from resuming raising interest rates later this month.
• In the 12 months through June, the CPI advanced 3.0%. That was the smallest year-on-year increase since March 2021 and followed a 4.0% rise in May. The CPI gained 0.2% last month after edging up 0.1% in May, the Labor Department said on Wednesday. The CPI was lifted by rises in gasoline prices as well as rents, which offset a decrease in the price of used motor vehicles.
• Economists polled by Reuters had forecast the CPI rising 0.3% last month and climbing 3.1% year-on-year. Excluding the volatile food and energy categories, the CPI increased 0.2% in June. It was the first time in six months that the so-called core CPI did not post monthly gains of at least 0.4%. In the 12 months through June, the core CPI rose 4.8% after increasing 5.3% in May.
• Annual consumer prices have retreated sharply from their 9.1% peak in June 2022, which was the biggest increase since November 1981 as last year's large rises dropped out of the calculation. Nevertheless, inflation remains well above the Fed's 2% target, with the labour market still tight.
• Though employment gains were the smallest in 2-1/2 years in June, the unemployment rate fell close to historically low levels and wage growth was strong.
• Core inflation is expected to continue receding in the months ahead. The labor market is cooling and independent measures show rents on a downward trend. Rent measures in the CPI tend to lag the independent gauges by several months.

(Source: Yahoo Finance)