On July 12, the Labor Department said the Consumer-Price Index climbed 3% in June compared with a year earlier, its slowest pace in more than two years, according to federal data and media reports.

June’s year-over-year inflation mark came in at just one-third of last summer’s roughly 9% peak, when the price of gasoline reached record average of $5 per gallon, according to a Wall Street Journal analysis. 

“The news may give some Americans relief from a continued period of increasing prices but remaining strong enough to leave the Federal Reserve on course to keep raising interest rates,” the WSJ reported.

The core June inflation index was up 4.8%, down from May’s 5.3% and was a bigger decrease than expected. The June rate declined from 4% in May, and it was March 2021 the last time inflation was this close to just 3%.

The index for shelter was the largest contributor to the monthly all items increase, accounting for over 70% of the increase, with the index for motor vehicle insurance also contributing, the Labor Department said.

The food index increased 0.1% in June after increasing 0.2% in May. The index for food at home was unchanged over the month while the index for food away from home rose 0.4% in June.

The energy index rose 0.6% in June, as the major energy component indexes were mixed. The index for all items less food and energy rose 0.2% in June, the smallest one-month increase in that index since August 2021, according to the data.

Indexes which increased in June included:

• Shelter
• Motor vehicle insurance
• Apparel
• Recreation
• Personal care

The indexes for airline fares, communication, used cars and trucks and household furnishings and operations were among those that decreased in June.