News
Consumers enjoy a break as daily spending inflation continues to cool
Americans plagued by rising prices over the past three years got the strongest signal yet on Thursday that inflation is finally cooling down.
The Consumer Price Index, a broad measure of the price of everyday goods including groceries, gasoline and rent, fell 0.1% in June from the previous month. Consumer prices were only 3% higher compared with a year ago — cooler than the May data and lower than economists had estimated.
Here’s what the latest inflation numbers from the Bureau of Labor Statistics mean for your family:
Price hikes ease on cell phones, TVs, used cars and more
The sting of rising prices should be felt as a smaller bite on several common purchases. Of note:
Used car prices, notoriously high during the pandemic, slowed by more than 10% compared to June 2023 and fell by 1.5% compared to May.
Airline ticket prices fell 5.1% from a year ago and 5% from the previous month.
Cell phones fell more than 10% year over year. TVs: nearly 6%. Smart home devices fell more than 4%, as did health insurance costs.
Auto Insurance Continues to Rise as Gas Prices Fall
Car insurance costs weren’t this bad 47 years ago.
Auto insurance prices have risen 19.5% since last June, a pain felt nationwide. The monthly index rose 0.9%, a reversal of May’s 0.3% decline.
Three consecutive years of underwriting losses mean insurers have paid out more in claims and expenses than they have collected in the premiums we pay — leading to the big increases we are seeing today.
Owning a car has generally become more expensive. Motor vehicle maintenance and repair costs are up 6% year-over-year. Meanwhile, parking and toll fees are 6.3% higher than they were in June 2023.
But there was modestly good news at the gas pump.
The gasoline index fell 3.8% in June on a monthly basis, a further slowdown from 3.6% in May. As of July 11, the national average for gasoline was $3.54 per gallon, up one cent from a month ago, according to AAA data.
Read more: Tips for Getting Cheap Car Insurance in 2024
Some prices cool down in the supermarket aisle
Food price increases — at least some of them — are slowing. The food index rose just 1.1 percent year-on-year, and 0.1 percent from May.
Some items that had the longest wait times were ham, potatoes, rice and apples.
But some foods remain stubbornly high. Frozen juices and beverages are up more than 20 percent year over year, and beef products continue to get more expensive. Ground beef is up 4.9 percent from last year, steaks are up 2.5 percent and roasts are up 10 percent. That translates to an average of $7.47 per pound for raw beef roasts.
While food prices overall are experiencing less volatility, consumers still felt the impact of inflation by eating out. Restaurant meals rose 0.4% from May and 4.1% from a year earlier.
This embedded content is not available in your region.
Elderly care and other health care costs continue to rise
Home health care for elderly or disabled family members saw another big increase, rising more than 11 percent over last year, according to the BLS.
Hospital and related services were 7% higher than a year ago. Inpatient hospital services increased 4.5% year over year, and outpatient care increased 7%.
Meanwhile, prescription drug costs rose 2.4%, but over-the-counter drugs rose nearly 6% year over year, though both indexes were relatively flat compared to May.
What is the next
The new reading is the first time since May 2020 that the headline monthly CPI has come in negative. It is also the slowest annual gain in prices since March 2021. But while inflation has fallen substantially from its peak of 9.1% in June 2022, the measure remains above the Federal Reserve’s 2% target.
Investors are betting heavily on a quarter percentage point interest rate cut when the Fed meets in September — and some Fed watchers even think a cut is possible when central bankers meet later this month.