Annual inflation recorded a significant slowdown in the United States in June, which could precipitate the U.S. Federal Reserve’s conclusion of its strongest monetary tightening cycle since the 1980s.
The Ministry of Commerce said today that inflation, measured by the personal consumption expenditure price index, rose 0.2 per cent last month after increasing 0.1 per cent in May.
In the twelve months to June, the personal consumption expenditure price index rose 3 per cent. This is the lowest annual increase since March 2021 and followed a 3.8 per cent increase in May, according to Reuters.
Excluding volatile items such as food and energy, the index rose 0.2 per cent in June after rising 0.3 per cent in the previous month.
The Commerce Department also said consumer spending, which accounts for more than two-thirds of the United States’ economic activity, rose 0.5 per cent last month. May’s data were adjusted upwards to show expenditure growth of 0.2 per cent instead of 0.1 per cent as previously reported.
Consumer spending rose 1.6 per cent year-on-year last quarter, down from 4.2 per cent between January and March.
The increase would have contributed to boosting the rate of economic growth to 2.4 per cent in the last quarter from the rate of 2 per cent declared in the first three months of the year.