Inflation Eases in June as Energy Prices Fall

Consumer prices rose 3.5% in June, less than expected following an easing in energy prices, while the month-to-month rate dropped 0.4%, the largest drop since April 2020.

The Report: According to the Bureau of Labor Statistics, the 0.4% seasonally adjusted basis decrease followed a 0.5% increase in May. The annual inflation rate of 3.5% is also down from a year-over-year gain of 4.2% in May and is reportedly lower than many economists expected. Core prices were unchanged in June, which is viewed as a positive sign showing underlying inflation is cooling. Indexes showing a decrease over the month including motor vehicle insurance, communication, apparel, medical care, and used cars and trucks. The report attributed the drop to a decrease in the cost of energy.

Trump Highlights Drop: Trump highlighted the "biggest monthly drop in over six years," and linked to a Just The News (Lean Right bias) article covering the decrease in a post on Truth Social.

Iran War's Impact: Outlets across the spectrum mentioned the war with Iran and the effects on the US economy. Fox Business (Lean Right) said that "inflation pulled back in June after surging in prior months due to the Iran war's impact on energy prices." Associated Press (Lean Left) said that the unchanged core prices show that "the gas price spike from the Iran war, while it pushed up airfares and some other costs, hasn't so far led to broad-based, sustained inflation." CNBC (Lean Left) highlighted chief economist at Navy Federal Credit Union Heather Long saying that "The concern is that this relief will be short-lived as the war in Iran re-starts."

"Room To Breathe": Outlets across the spectrum, including Fox Business and Associated Press also highlighted economists saying that the report gave the Federal Reserve "room to breathe," explaining that it relieves the pressure for immediate action, and allows the Fed to take a "wait-and-see stance on what to do with interest rates.

Related: Jobs Report Shows Slower But Steady Hiring In June                                                     

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