Consumer prices post sharpest decline in six years as inflation cools dramatically in June

Consumer prices didn’t just cool in June. They fell off a cliff.

The Department of Labor reported Tuesday that the consumer price index dropped 0.4% month-over-month, the largest single-month decline since April 2020. Economists had penciled in a modest 0.1% dip.

Annual inflation slid to 3.5%, down from 4.2% in May. The culprit, or hero depending on your perspective: energy prices cratered 5.7%, with gasoline alone plunging 9.7%.

What the numbers actually say

Core CPI, which strips out the volatile food and energy categories, was essentially flat month-over-month. On a year-over-year basis, core inflation dropped to 2.6%.