MNI BRIEF: US CPI Softer Than Expected Again In June

MNI (WASHINGTON) - U.S. CPI in June fell 0.056% and core CPI rose just 0.065%, below analyst expectations for a 0.2% rise in both categories, the Bureau of Labor Statistics said Thursday, bolstering hopes the Federal Reserve could begin cutting interest rates fairly soon. 

The 12-month rate eased three-tenths to 3.0% for headline CPI and a tenth to 3.3% for core. Rent and owners' equivalent rent both increased 0.3%, the smallest increases since August 2021, the BLS said. The shelter index has increased 5.2% over the past year, accounting for nearly 70% of the total increase in headline CPI. 

Core services categories outside of housing fell another 0.052% after a 0.042% surprise decline in May. Gasoline prices fell 3.8% in June, driving the decline in headline inflation. (See: MNI INTERVIEW: Dec Fed Cut Doubtful If Trump Wins - Obstfeld)

Initial jobless claims also fell 17,000 to 222,000 in the week ended July 6, and continuing claims edged down, the BLS said in a separate report. The odds of a third Federal Reserve interest rate cut in 2024 rose to 37% after the data.