The price growth rate in the US has slowed to its lowest pace in over two years, with inflation rising by 3% in the year to June, compared to 4% in May. The decline in inflation can be attributed to cheaper used cars, while higher housing costs contributed to the rise. Analysts still anticipate the US Federal Reserve implementing further interest rate increases despite the slowdown.
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Key points:Â
- Inflation in the US dropped to its slowest pace in more than two years, reaching 3% in the year to June.
- Cheaper used cars and trucks and declining food prices, such as pork, milk, and eggs, contributed to the slowdown in inflation.
- Despite the decline, the Federal Reserve is expected to raise interest rates again this month due to concerns about inflation persistence.
- The US has made relatively rapid progress in curbing price increases compared to the UK, where inflation reached 8.7% in the year to May.
- Core inflation, which excludes food and energy costs, showed signs of stalling but remained higher than the bank’s 2% target. The US Labor Department reported a smaller-than-expected increase in core inflation between May and June.
