US CPI falls 0.4% in June, biggest drop since 2020

Consumer prices in the United States recorded their largest monthly decline in more than six years in June, a sharp reversal that brought the annual inflation rate down to 3.5 percent. The data, released by the U.S. Bureau of Labor Statistics on Tuesday, July 14, 2026, showed the seasonally adjusted Consumer Price Index fell 0.4 percent from May, marking the biggest drop since April 2020.

The decline was driven primarily by a steep 5.7 percent drop in energy prices, the largest one-month decrease in that category since April 2020. Gasoline prices fell 9.7 percent over the month. The report defied economists' expectations, which had forecast a more modest 0.1 percent monthly decline and an annual inflation rate of 3.8 percent.

The so-called core index, which excludes volatile food and energy costs, was unchanged from May. Compared to a year earlier, core inflation eased to 2.6 percent, down from 2.9 percent in May and below expectations of 2.8 percent. This flat monthly reading for core prices was the best since January 2021.

Several other key categories showed cooling price pressures. The shelter index, a major component of inflation, rose just 0.1 percent in June, its smallest...