Consumer prices in the United States fell 0.4% in June from the previous month, driven by a sharp decline in energy costs, according to the Consumer Price Index (CPI) released Tuesday by the Bureau of Labor Statistics.
Energy prices plummeted 5.7%, the largest monthly drop since April 2020, with oil prices falling 9.7% and gasoline prices down 9.5%. The average price for a gallon of gasoline now stands at $3.85, down from $4.07 a month ago, according to the American Automobile Association (AAA).
White House Deputy Press Secretary Kush Desai touted the decline on social media platform X, citing President Donald Trump's prediction that easing tensions in the Strait of Hormuz would cause oil prices and inflation to "plummet like a rock."
However, experts caution that the reprieve could be temporary. A ceasefire between the US and Iran collapsed after commercial tankers were hit in fighting last week, and prices have since climbed from $3.79, according to AAA data. Patrick De Haan, head of petroleum analysis at GasBuddy, noted that the June CPI is a "rearview mirror" reflecting prices from weeks ago, with new escalations pushing oil prices back above $80 and gasoline averaging $3.81 and rising.
Other sectors also saw pullbacks: apparel costs fell 0.6%, used car and truck prices dropped 0.2%, and electricity ticked down 1%. Food prices rose 0.2% month-over-month, with meat prices up 0.6% and lettuce surging 6.5%. Tomato prices, however, tumbled 10%.
Year-over-year data tells a different story. The CPI rose 3.5% after a 4.2% increase in May, the largest annual gain in over three years. Energy prices jumped 15.7% year-over-year, with gasoline up 27%. Shelter costs increased 3%. Grocery prices were 3% higher than last year, with meat up 7.4% and fresh fruits and vegetables up 5.3%.
The CPI report comes amid heightened pressure on the Federal Reserve under new leadership. Fed Chairman Kevin Warsh, who succeeded Jerome Powell in May, told lawmakers in prepared remarks that the central bank has "no tolerance for persistently elevated inflation." CME FedWatch indicates an 87.7% probability that interest rates will remain at 3.5-3.75% at the next policy meeting.
US markets trended upward following the data release, with the Nasdaq up 0.9%, the S&P 500 up 0.5%, and the Dow Jones Industrial Average up 0.1% in midday trading.
Source: www.aljazeera.com