WASHINGTON, D.C. / RankWire.AI / – In June, U.S. consumer prices declined by 0.4 percent, marking the biggest monthly decrease since April 2020. The Consumer Price Index had increased by 0.5 percent in May. The U.S. Bureau of Labor Statistics released these figures on Tuesday. The report indicates widespread price relief outside certain food and household categories.
Most of the monthly decline was driven by energy costs. The energy index fell 5.7 percent after a 3.9 percent rise in May. Gasoline prices dropped 9.7 percent, while fuel oil costs decreased 9.2 percent. Electricity prices went down 1.0 percent, although utility gas service increased 0.5 percent. Despite these drops, energy prices remain 15.7 percent higher than a year earlier.
Core inflation also eased in June. Prices excluding food and energy showed no change from the previous month after a 0.2 percent increase in May. Over the past year, the core index rose 2.6 percent, down from 2.9 percent. Shelter costs increased by 0.1 percent, their smallest monthly rise since January 2021. Rent went up 0.1 percent, and owners’ equivalent rent increased 0.2 percent.
Energy decline pulls down overall inflation
Food prices increased by 0.2 percent for the second month in a row. Grocery costs also rose 0.2 percent, with restaurant prices gaining the same amount. Eggs became 4.3 percent more expensive during June. Dairy prices increased by 1.2 percent, but coffee prices fell 2.0 percent. The overall food index is 3.0 percent higher than in June 2025.
Price movements varied across other key consumer sectors. Motor vehicle insurance decreased 2.0 percent, and communication services declined 1.5 percent. Apparel prices fell 0.6 percent, while used vehicle prices slipped 0.2 percent. Medical care costs edged down 0.1 percent, although hospital services saw a slight increase. Recreation prices rose 0.5 percent, and personal care costs went up 0.2 percent.
Federal Reserve gears up for July policy meeting
The inflation data released two weeks ahead of the Federal Reserve’s upcoming policy gathering. Officials maintained the federal funds rate between 3.50 percent and 3.75 percent in June. The central bank’s next two-day meeting is scheduled to begin on July 28. Its long-term inflation target remains at 2 percent. Although June’s annual CPI rate stayed above this target, it showed a significant slowdown from May.
The CPI tracks price changes across housing, transportation, food, medical care, clothing, and other consumer expenses. Its primary urban index covers over 90 percent of the U.S. population. Before seasonal adjustments, prices decreased by 0.3 percent in June. The all-items index reached 333.952, while the urban wage earner index increased by 3.5 percent annually. The July inflation report is scheduled for release on August 12.