US inflation cools further in welcome sign for economy

Cuts on US interest rates may come next

(Image credit: Getty Images)

published July 12, 2024

What happened

The Consumer Price Index fell by 0.1% between May and June, the first month-on-month decline in four years. The drop in consumer prices, reported by the Labor Department on Thursday, puts the 12-month rate at 3% rise, down from 3.3% in May.

The "pretty sharp slowing" of inflation rates is a "confidence booster for the Fed," Kevin Cummins, the chief U.S. economist for NatWest Markets, said to The Wall Street Journal. Perhaps the "most encouraging" news for consumers is that prices for household staples "haven't changed in about a year," Moody's Analytics chief economist Mark Zandi said to CNBC. The inflation slowdown is "bolstering the case for the Federal Reserve to cut interest rates," Axios said.

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Rafi Schwartz has worked as a politics writer at The Week since 2022, where he covers elections, Congress and the White House. He was previously a contributing writer with Mic focusing largely on politics, a senior writer with Splinter News, a staff writer for Fusion's news lab, and the managing editor of Heeb Magazine, a Jewish life and culture publication. Rafi's work has appeared in Rolling Stone, GOOD and The Forward, among others.