WASHINGTON, D.C. / RankWire.AI / – U.S. consumer prices decreased by 0.4 percent in June, marking the biggest monthly drop since April 2020. The Consumer Price Index had increased by 0.5 percent in May. The U.S. Bureau of Labor Statistics published these figures on Tuesday. The report indicated widespread price relief across many categories, excluding some food and household items.
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, while fuel oil costs declined 9.2 percent. Electricity prices decreased 1.0 percent, although utility gas service increased 0.5 percent. Energy remained 15.7 percent higher than in the same month last year.
Core inflation also eased in June. Prices excluding food and energy showed no change from the previous month after a 0.2 percent rise in May. Over the past year, the core index increased by 2.6 percent, down from 2.9 percent. Shelter costs increased by 0.1 percent, their smallest monthly rise since January 2021. Rent increased 0.1 percent, while owners’ equivalent rent went up by 0.2 percent.
Energy decline helps reduce overall inflation
Food prices rose by 0.2 percent for the second month in a row. Grocery prices increased by the same margin, and restaurant prices also grew 0.2 percent. Eggs became 4.3 percent more expensive in June. Dairy prices rose 1.2 percent, but coffee prices fell 2.0 percent. The overall food index was 3.0 percent higher than in June 2025.
Price movements varied across other significant consumer sectors. Motor vehicle insurance decreased 2.0 percent, and communication services declined 1.5 percent. Apparel prices dropped 0.6 percent, while used vehicle prices decreased 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 expenses went up 0.2 percent.
Federal Reserve heads into July policy meeting
This inflation report comes two weeks before the Federal Reserve’s upcoming policy discussion. In June, officials maintained the federal funds rate between 3.50 percent and 3.75 percent. The next two-day meeting is scheduled to start on July 28. The Fed’s long-term inflation goal remains at 2 percent. Despite a notable slowdown from May, June’s annual CPI rate remained above that target.
The Consumer Price Index tracks price changes across sectors such as 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 experienced a 3.5 percent annual increase. The July inflation data is scheduled for publication on August 12.