Key takeaways

• Gasoline prices fell 9.7% in June, helping drive the largest monthly decline in headline inflation in six years.
• Overall inflation eased to 3.5% annually, down from 4.2% in May and below economists' expectations. 
• Core inflation — excluding food and energy — was unchanged in June, as broader price pressures also eased.  

U.S. consumer prices fell 0.4% in June, the largest monthly decline since April 2020, as lower gasoline prices pulled inflation down after this spring's energy-driven increases.¹

On an annual basis, the Consumer Price Index rose 3.5% in the past 12 months through June, down from 4.2% in May and below economists' expectations, according to new data from the Bureau of Labor Statistics.²

The energy index fell 5.7% during the month, led by a 9.7% drop in gasoline prices. Food prices did edge higher, rising 0.2% in June for both grocery shopping and restaurants.³ 

Elsewhere, prices declined for apparel, medical care, vehicle insurance, communication services, and used cars and trucks. Core inflation, which excludes food and energy, was unchanged in June and slowed to 2.6% over the past year ending in June.⁴ 

Here's a closer look at some of the biggest movers in the latest CPI.

Grocery prices inch higher

While falling gas prices accounted for the biggest monthly changes, food costs continued to rise modestly in June.

The food-at-home index increased 0.2% during the month and is up 2.7% over the past year. Meats, poultry, and fish rose 0.4% in June, while dairy products climbed 1.2%. Cereals and bakery products also increased 0.3%.⁵ 

Not every aisle became more expensive. Prices for fruits and vegetables dipped 0.2% in June after strong gains earlier this spring, while nonalcoholic beverages fell 1.5% for the month. Even with the monthly decline, fruits and vegetables remain 5.3% more expensive than a year ago. The same is true for meats, poultry and fish, which have risen 5.7% annually.⁶ 

Dining out costs also continued on an upward trajectory.  The food-away-from-home category — restaurants and take-out — increased 0.2% in June and is up 3.4% over the past 12 months, outpacing grocery inflation.⁷ 

Read more: CPI update: Gas, groceries drive April inflation spike

Drivers catch a break while travel stays expensive

Transportation costs were mixed in June as lower gas prices eased one of the biggest household expenses.

Gasoline prices fell 9.7% during the month, helping offset higher prices seen earlier this year. Despite the monthly decline, drivers are paying 26.7% higher costs than a year ago after the energy price surge in early 2026. Home fuel oil also dropped 9.2% in June.⁸ 

Auto owners received additional relief in a few areas. Motor vehicle insurance fell 2% during the month and is now 4.1% lower than a year ago. Prices for used cars and trucks also have eased, down 0.2% in June and 2.2% on a yearly basis^.9

Travel costs, however, remained elevated as the summer season reaches its peak. Airline fares edged up another 0.2% in June and are 26.5% higher than a year earlier, reflecting higher airline operating costs and strong seasonal demand from U.S. travelers.¹⁰

 Vehicle maintenance and repair prices also increased 1.1% during the month and are up 7% annually.¹¹

Read more: 4 spending strategies for peak summer travel

Clothing, communications costs ease

Several consumer goods and services categories became less expensive in June, helping keep broader inflation in check.

The apparel index fell 0.6% during the month, reversing some of the increases seen earlier this year, but remains up 3.4% on the year. The communication index — including cell phone and internet services — declined 1.5% for the month while medical care prices also slipped 0.1%.¹² 

Not every category moved lower. Furniture and bedding rose 0.5% and personal care products increased 0.2% on the month. Toys (2.5%), sporting goods (1.6%), and even admission to sporting events (3.3%) also saw June gains.¹³ 

But those monthly gains were largely offset by declines elsewhere, leaving core inflation unchanged for the month.¹⁴ 

Read more: How secondhand shopping is changing the CPI