The Consumer Price Index (CPI), one of the most widely watched measures of inflation, fell by 0.4% in June after increasing 0.5% in May. On an annual basis, consumer prices were still 3.5% higher than they were a year ago, but that’s an improvement from the 4.2% annual increase reported the previous month.

The biggest contributor to June’s lower inflation reading was energy. According to the BLS, the energy index fell 5.7% in June after posting increases in the previous three months. Lower energy prices more than offset increases in other categories such as food and housing.

While June’s CPI report showed easing inflation pressures, energy markets remain influenced by a range of factors, including seasonal demand, weather patterns, global supply conditions, and broader economic trends.

U.S. Bureau of Labor Statistics