Inflation fell to an annual rate of 3 percent in June, according to data released Wednesday by the Labor Department, giving consumers more breathing room after nearly two years of high prices.
The latest rate is still shy of the Federal Reserve’s 2 percent target. A series of aggressive interest rate hikes by the Fed has helped cool price increases across the U.S. economy over the past 12 months.
“The Central Bank has been on a campaign to rein in inflation for nearly a year and a half, pausing a beat last month to let things simmer. They’ve signaled two more rate increases before the end of the year, but this clear sign of slowed growth could be fodder for ending hikes sooner,” NerdWallet data analyst Elizabeth Renter said in a note on the latest consumer price index.
The price of these items are among those that rose and fell the most from May to June 2023.
Housing costs are driving inflation
Rising rents and housing costs were the main contributors to price growth in June, making up more than 70 percent of the total increase in inflation. Shelter prices are up 7.8 percent on the year and 0.4 percent last month alone.
Inflation metrics are still catching up to massive spike in rents and housing prices seen in the wake of the pandemic. While rents and home prices have stablized or even dropped in many regions of the country, housing costs are still far higher than many families can handle.
Airline fares and egg prices see biggest drop
The price of communication, used cars and trucks, and household furnishings and supplies notably decreased in June, according to the Labor Department.
Airline fares dropped 8.1 percent last month, the biggest decrease among expenditures tracked. Fares fell 18.9 percent from June 2022, in part due to the decrease in the cost of fuel.
The price of fuel oil, which spiked after the Russian invasion of Ukraine drove up global energy and fuel prices, has dropped 36.6 percent since June 2022. Prices for fuel oil dropped 0.4 percent in June.
Egg prices also dropped precipitously. The price of eggs, which fell nearly 14 percent in May, decreased by an additional 7.3 percent in June, according to the latest Labor Department data.
Several factors contributed to sky-high egg prices in recent months, including an avian flu outbreak that spread among chickens in 2022, reducing the overall egg supply.
Sports tickets, fruit and musical instruments on the rise
Admission to sporting events rose 5.5 percent from May to June, the largest month-to-month increase among expenditures tracked by the Labor Department. Admissions were up 2.5 percent overall, with admission to movies, theaters and concerts rising 0.5 percent.
The price of fruits — excluding apples, bananas and citrus fruits — jumped 4.7 percent last month. Tomatoes, categorized as a vegetable by the Labor Department even though they have characteristics of fruit, rose 2.5 percent.
Musical instruments and accessories increased by 2.7 percent. Notably, the price of musical instruments and accessories is up 10.2 percent from June 2022.
Intercity transportation also rose by 2.7 percent in June, even as the cost of public transportation is overall down by 6.8 percent.
The cost of motor vehicle insurance, apparel, recreation and personal care drove consumer price increases in June, according to the Labor Department.
Excluding food and energy, prices rose 4.8 percent over a 12 month period and 0.2 percent in June, the smallest monthly increase since August 2021.
—Updated at 3:09 p.m.