WASHINGTON, D.C. / RankWire.AI / – In June, U.S. consumer prices declined by 0.4 percent, marking the most significant monthly decrease since April 2020. The Consumer Price Index had increased by 0.5 percent in May. The U.S. Bureau of Labor Statistics issued the data on Tuesday. The report indicated widespread price relief outside certain food and household sectors.
Most of the monthly decline was driven by energy costs. The energy index fell 5.7 percent after rising 3.9 percent in May. Gasoline prices dropped 9.7 percent, fuel oil costs decreased 9.2 percent, and electricity prices declined 1.0 percent, although utility gas service increased by 0.5 percent. Energy prices were still 15.7 percent higher than a year earlier.
Core inflation also slowed in June. Prices excluding food and energy remained unchanged month-over-month after a 0.2 percent rise in May. Over the past 12 months, the core index increased by 2.6 percent, down from 2.9 percent. Shelter costs rose by 0.1 percent, their smallest monthly gain since January 2021. Rent increased 0.1 percent, while owners’ equivalent rent went up 0.2 percent.
Energy decline contributes to lower headline inflation
Food prices increased by 0.2 percent for the second straight month. Grocery prices went up by the same amount, and restaurant prices also rose 0.2 percent. Eggs became 4.3 percent more expensive during June. Dairy prices increased 1.2 percent, but coffee prices fell 2.0 percent. The overall food index was 3.0 percent higher than in June 2025.
Price shifts varied across other key consumer categories. Motor vehicle insurance decreased 2.0 percent, and communication services declined 1.5 percent. Apparel prices fell 0.6 percent, while used vehicle prices dropped 0.2 percent. Medical care costs edged down 0.1 percent, though hospital services saw a slight increase. Recreation prices went up 0.5 percent, and personal care expenses rose 0.2 percent.
Federal Reserve gears up for July policy meeting
This inflation report arrives two weeks before the Federal Reserve’s upcoming policy gathering. In June, officials maintained the federal funds rate between 3.50 percent and 3.75 percent. The central bank’s next two-day meeting begins on July 28. Their long-term inflation goal remains at 2 percent. Despite a slowdown from May, June’s annual CPI rate stayed above that target.
The CPI tracks price changes across housing, transportation, food, medical care, clothing, and other consumer expenses. Its main urban index covers over 90 percent of the U.S. population. Before seasonal adjustments, prices fell 0.3 percent in June. The all-items index reached 333.952, and the urban wage earner index increased 3.5 percent annually. The inflation report for July is scheduled for release on August 12.