The Labor Department said Wednesday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 0.2% in June from the previous month.
Prices climbed 3% on an annual basis. Although inflation has cooled from a peak of 9.1%, it still remains above the Federal Reserve’s 2% target rate.
Other parts of the report pointed to a steady retreat for inflation. Core prices, which exclude the more volatile measurements of food and energy, climbed 0.2%, or 4.8% annually.
The report is the last before the Fed’s policy-setting next meeting on July 25-26 and will have major implications for the U.S. central bank, which raised interest rates 10 straight times over the course of 15 months in a bid to crush out-of-control inflation.
“Prices for everything from eggs to used cars dropped in June, causing a big deflation in inflation,” said Robert Frick, a corporate economist for the Navy Federal Credit Union. “By one measure, inflation is just one-third of what it was a year ago. However, this is not yet a turning point. Core inflation will prove tougher to beat.”