People shop at a market in Brooklyn, New York City, on June 12, 2023.
Image of Michael M. Santiago/Getty
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Image of Michael M. Santiago/Getty
People shop at a market in Brooklyn, New York City, on June 12, 2023.
Image of Michael M. Santiago/Getty
Annual inflation hit 3% in June, the lowest since March 2021, a sign that the Federal Reserve’s aggressive interest rate hikes are having an impact, although the agency has may have to take more action.
Measured from May to June, consumer prices rose only 0.2%, according to a Labor Department report on Wednesday.
The increase in rent and clothing prices last month was partially offset by lower prices for airline tickets, used cars and furniture.
Gasoline prices rose 1% last month but are down more than 26% from a year ago, when pump prices hit an all-time high of more than $5 a gallon.
Meanwhile, grocery prices were flat last month, while the cost of restaurant meals rose 0.4 percent.
Although inflation continues to ease, it remains higher than the Federal Reserve would like.
Ignoring volatile food and energy prices, so-called “core inflation” was 4.8% in June.
This is much higher than the Federal Reserve’s 2% target, and it means the Fed is expected to raise interest rates again, perhaps a quarter of a percentage point, when it meets next week. later this month after keeping rates unchanged at the previous meeting last month.
