MNI BRIEF: US June CPI Surprises To Downside

U.S. CPI added 0.180% on the month, a tenth lower than analysts expected and the smallest monthly increase since August 2021, bringing the 12-month rate to 3.0%, the lowest since March 2021, the Bureau of Labor Statistics said Wednesday. U.S. core CPI for June also slowed more than expected to a 0.158% rise on the month, pulling down the annual rate to 4.8% from 5.3% in May.

The inflation data are good news for the Federal Reserve, especially as the non-housing core services category saw a large moderation in the month, coming in nearly flat after a 0.2% increase in May. Fed Chair Jerome Powell and other officials had noted the persistence of inflation in those categories, which count labor costs as a large component. Shelter continued to count for over 70% of the increase in CPI, rising 0.4% in the month and 7.8% over the year. (See: MNI INTERVIEW: Resilient Jobs Mean Fed Can Tighten More-Kamin)