US Annual Inflation Rate Eases to 3 Percent

The U.S. annual inflation rate eased for the third consecutive month and came in below the consensus estimate, offering the Federal Reserve further evidence that progress is being made in returning to the central bank’s 2 percent target rate.

According to the Bureau of Labor Statistics, the consumer price index (CPI) slowed to 3 percent in June, down from 3.3 percent in May. The consensus estimate was 3.1 percent, and headline inflation was at a 12-month low.

This was the 39th consecutive month that the CPI was at or above 3 percent. The 6-month annualized rate slipped to a nine-month low of 3.3 percent.

Consumer prices fell by 0.1 percent monthly, below the forecasted 0.1 percent increase. This was down from the flat reading in May and was the first report showing retail prices falling since the beginning of the coronavirus pandemic.

Core inflation, which excludes volatile food and energy components, also eased to 3.3 percent last month, down from 3.4 percent the previous month. The projection was 3.4 percent.

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