Inflation fell last month for the first time in six years, new data showed Thursday, but the seemingly welcome reading is likely a temporary blip.
The Personal Consumption Expenditures price index – the gauge used by the Federal Reserve for its target inflation rate – dropped 0.1% from May, bringing the annual rate to 3.7% from 4.1%, Commerce Department data showed.
The inflation slowdown – which was expected – is largely due to energy prices, notably those at the fuel pump, which tumbled amid a false dawn in the Middle East war: In mid-June, the US and Iran reached a Memorandum of Understanding and ceasefire that ultimately was broken later that month.
When stripping out volatile energy and food prices, the “core” PCE index rose 0.1% on a monthly basis and was up 3.3% from a year ago.
The PCE price index is part of the Commerce Department’s monthly Personal Income and Outlays report, which includes comprehensive data on how Americans earn, spend and save.
