FX.co ★ US Inflation Rate Falls More than Expected

The annual inflation rate in the US eased to 3.5% in June 2026, its first decline in five months, down from 4.2% in May and below market expectations of 3.8%.

Energy costs rose 15.7%, decelerating from 23.5% in May as the ceasefire between the US and Iran reduced inflationary pressures from the energy sector. Within energy, gasoline prices increased 26.7% (vs 40.5% in May), while fuel oil advanced 42.9% (vs 58.9%). Price growth also slowed for shelter (3.3% vs 3.4%) and food (3% vs 3.1%).

On a monthly basis, the CPI fell 0.4%, a sharper decline than the expected 0.1% drop and the steepest decrease since April 2020. Energy prices were down 5.7%, following increases of 3.9% in May, 3.8% in April, and 10.9% in March, with gasoline alone falling 9.7%. The pullback in energy more than offset modest increases in other components, including shelter (+0.1%) and food (+0.2%).

Core inflation, which excludes food and energy, slowed on an annual basis to 2.6% from 2.9%, undershooting forecasts of 2.8%. Month over month, the core CPI was unchanged, defying expectations of a 0.2% increase.