The US seasonally adjusted consumer price index, a measure of inflation, fell by 0.4% in June, compared with expectations for a 0.1% decrease in a survey compiled by Bloomberg as of 7:35 am ET and following a 0.5% increase in May, according to data released Tuesday by the Bureau of Labor Statistics.
Core CPI, which excludes food and energy prices, held steady, compared with the consensus estimate for a 0.2% gain. Core CPI rose by 0.2% in May.
Food prices increased by 0.2%, while energy prices were down 5.7%. Gasoline prices declined by 9.7%. Excluding only energy, CPI was flat in June after a 0.2% gain in May.
Owners' equivalent rents increased by 0.2%, while regular rents increased by 0.1%. There were also notable declines in apparel, used vehicles, medical care commodities, medical care services, and transportation services.
CPI excluding food, energy and shelter decreased by 0.1% after a 0.1% gain in the previous month.
The year-over-year rates for overall and core CPI slowed to 3.5% and 2.6%, respectively, from 4.2% and 2.9% in the previous month.
The monthly consumer price index, or CPI, reported by the Bureau of Labor Statistics, measures the index level of prices paid by consumers for a basket of goods and services such as food, energy, vehicle, medical care, apparel, and housing.
The core measure, which excludes food and energy due to their volatility, is closely watched by markets and the Federal Reserve as a sign of underlying inflation pressures.
Rising inflation is a sign of strong US consumer demand, but both stocks and bond normally react negatively to level of price growth that would necessitate higher interest rates.