CPI Report: Annual Inflation Rate Comes In At 3.5% In June, Lower Than Expected As Energy Prices Ease

• Core CPI, which excludes food and energy, was flat in June, compared to a Dow Jones estimate of a 0.2% increase.
• Easing energy costs led to a decline in headline prices, with the energy index down 5.7% in June, the largest one-month decline since April 2020.
• The BLS report also stated that the gasoline index fell 9.7% in June, while the index for electricity fell 1%.

U.S. consumer prices cooled more than expected in June, according to the Consumer Price Index (CPI) report released on Tuesday, with both headline and core CPI coming in softer than economists forecasted.

According to data from the Bureau of Labor Statistics (BLS), on a seasonally adjusted basis, CPI fell 0.4% in June, after rising 0.5% in May. This was the largest single-month decline since April 2020, the BLS noted.

This pushed the annual inflation rate to 3.5% before seasonal adjustment, amid easing energy prices.

Core CPI, which excludes food and energy, was flat in June, compared to a Dow Jones estimate of a 0.2% increase, according to MarketWatch data.

On an annual basis, core CPI stood at 2.6%, lower than Wall Street expectations. The headline and core inflation are still above the Federal Reserve’s long-term target of 2%.

Source: Bureau of Labor Statistics, U.S. Department of Labor

Energy Costs Ease

Easing energy costs led the decline in headline prices, with the index for energy declining 5.7% in June, registering the largest one-month decline since April 2020.

The BLS report also stated that the gasoline index fell 9.7% in June, while the index for electricity fell 1%.

Over the 12-month period ending in June, the index for energy is up 15.7%, while the gasoline index is up 26.7%.

Food Costs Edge Up

The BLS report also stated that food costs inched up by 0.2% during June, while the shelter index rose 0.1%.

The indexes for communication services, motor vehicle insurance, and medical care declined in June. However, rent, household furnishings and operations, and recreation prices rose during the month, the report stated.

Meanwhile, U.S. equities were mixed in Tuesday’s pre-market trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.23%; the Invesco QQQ Trust ETF (QQQ) rose 1.06%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 0.2%. Retail sentiment on Stocktwits regarding the S&P 500 ETF was in the ‘bullish’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) was up 0.34% at the time of writing.

Also See: CPI Report Today: Fed Has 'Little Reason' To Raise Rates, Says Wharton's Jeremy Siegel — But It Depends On Where Oil Prices Go

For updates and corrections, email newsroom[at]stocktwits[dot]com.