U.S. consumer prices fell more than expected in June, recording the largest
monthly drop since April 2020 as a sharp fall in energy eased recent
inflationary pressure. Headline CPI declined 0.4% m/m (seasonally adjusted),
taking the y/y rate to 3.5%; economists had penciled in -0.2% m/m and 3.8% y/y.
Core CPI (ex food and energy) was unchanged m/m, with the 12-month rate at 2.6%
versus market expectations of +0.2% m/m and 2.9% y/y. The energy index plunged
5.7% m/m (still +15.7% y/y); gasoline and fuel oil each fell more than 9%.
Services inflation excluding energy eased noticeably—a key Fed-watch
category—with housing up just 0.1% and transportation services down 0.3%. Food
rose 0.2% m/m; new vehicle prices were flat; used cars and trucks fell 0.2%;
apparel declined 0.6%.
