Inflation in the US declined in June, led by drop in gasoline prices

Inflation in the United States cooled in June, the Bureau of Labor Statistics announced in a report published on July 11, beating economists’ expectations and marking the first monthly decline in consumer prices since May 2020.

The 0.1% decline in the Consumer Price Index, an economic measure of the change in prices for consumer goods and services, was led by a drop in gasoline and fuel prices. Gas prices dropped 3.8% between May and June, while the price of fuel oil used to heat and power homes dropped 2.4%, according to the BLS report. Prices for new and used vehicles also declined from May to June, as did the cost of transportation services. 

“No matter how you look at it, inflation was basically non-existent during the month of June,” Jason Furman, an economics professor at Harvard University and the former chair of the Council of Economic Advisers under President Barack Obama, posted on X.

Experts say that slowing inflation could lead the Federal Reserve, the United States’ central bank, which sets monetary policy, to cut interest rates this fall.

Democrats celebrated the inflation report.

“Today’s CPI report is unequivocally good news for the country,” Rep. Don Beyer (D-VA), the senior House Democrat on Congress’ Joint Economic Committee, said on X. “After being flat in May, prices declined in June. Wages continued to rise faster than inflation. Energy prices went down. Grocery prices fell again. Housing inflation slowed. This is exactly what we want to see.”

“Today’s report shows that we are making significant progress fighting inflation,” President Joe Biden said in a statement. “Thanks to my economic plan, wages are rising faster than prices, we’ve created 15.7 million jobs, and communities that were left behind by my predecessor are making ‘a remarkable comeback.'”

Still, Biden said, there is more to be done, including pushing big corporations that are making record profits to lower prices.

He said Republicans’ plans for the economy, including slashing taxes for the wealthiest Americans and increasing tariffs on imported goods, would make inflation worse.

“Republicans are only looking after themselves,” Biden said. “They want to cut taxes for billionaires and raise costs for the middle class by $2,500, which Nobel economists and business leaders agree will ‘reignite’ inflation. While Republicans side with special interests, I’ll do everything I can for the working people that built our economy.”