After being plagued by rising prices for the past three years, Americans on Thursday saw the strongest sign yet that inflation is finally starting to subside.
The Consumer Price Index (CPI), a broad gauge of the prices of everyday items like food, gasoline and rent, fell 0.1% from the previous month in June. Consumer prices were up just 3% from a year earlier, lower than the May data and lower than economists had forecast.
Here’s what the Bureau of Labor Statistics’ latest inflation numbers mean for your household.
Prices of mobile phones, televisions, used cars, etc. are rising slowly
Some common purchases should feel less painful from rising prices. Things to look out for:
Used-car prices, which notoriously soared during the pandemic, slowed by more than 10% compared with June 2023 and are down 1.5% from May.
Airfares are down 5.1% from last year and 5% month-on-month.
Mobile phones were down more than 10% year over year. Televisions were down about 6%. Smart home devices were down more than 4% and health insurance costs were down as well.
Gas prices are falling while auto insurance prices continue to rise
Auto insurance rates haven’t been this high in 47 years.
Auto insurance rates have risen 19.5% since June of last year, with the pain felt across the country. The monthly index rose 0.9%, reversing a 0.3% decline in May.
Three consecutive years of underwriting losses mean that claims and expenses paid by insurers are exceeding the premium income we receive, leading to the steep price increases you are feeling today.
Owning a car in general is becoming more expensive. The cost of car maintenance and repairs increased 6% year-on-year, while parking fees and tolls increased 6.3% from June 2023.
But there was some good news at the gas station.
The gasoline index fell 3.8% month-over-month in June, slowing further from May’s 3.6% decline. As of July 11, the national average price of gasoline was $3.54 per gallon, up 10 cents from a month ago, according to AAA data.
Read more: Tips for getting cheap car insurance in 2024
Prices fall in the grocery store
Food price increases are at least partly easing: The food index is up just 1.1% from a year ago and up 0.1% from May.
Items with the longest cooldown times included ham, potatoes, rice, and apples.
But some foods remain expensive. Frozen juices and beverages are up more than 20% from a year ago, and beef products continue to climb in price: Ground beef is up 4.9% from a year ago, steaks are up 2.5%, and roasts are up 10%. That means raw roast beef is averaging $7.47 per pound, according to data from the Federal Reserve Bank of St. Louis.
While overall food price volatility has decreased, consumers are still feeling the effects of inflation when eating out, with spending on meals at restaurants up 0.4% from May and 4.1% from a year ago.
Elderly care and other health care costs continue to rise
The BLS survey found that home health care for elderly and disabled family members increased significantly again, up more than 11 percent from the previous year.
Hospital and related services increased 7% year over year. Inpatient hospital services increased 4.5% year over year, and outpatient medical services increased 7% year over year.
Meanwhile, prescription drug costs increased 2.4%, while over-the-counter drug costs increased about 6% from a year ago, though both indices were roughly flat compared to May.
What’s next?
The new reading marks the first negative monthly headline CPI reading since May 2020. It also marks the lowest annualized inflation rate since March 2021. But while inflation has fallen significantly from its peak of 9.1% in June 2022, the measure still remains above the Federal Reserve’s 2% target.
Investors are highly expecting a quarter-point rate cut when the Fed meets in September, and some Fed watchers believe a cut is even possible when the central bank meets later this month.