The consumer price index, which indicates the U.S. inflation rate, dropped to 3% in June, falling from 4% a month earlier, according to data released Wednesday by the Bureau of Labor Statistics.
According to the BLS, the overall price of goods increased by 0.2% from May to June as the price of goods and services has seen more modest price gains compared to the year prior. The consumer price index peaked in June 2022 at 9.2%. The consumer price index weighs the costs of goods based on their importance. Items like food, shelter and energy tend to be weighted more heavily.The Federal Reserve has stated its goal is to get the annual rate of inflation to 3%.
The biggest reason inflation dropped was energy costs have declined for American consumers over the last year. Gasoline costs fell 26.5% from the record high costs of a year ago. Natural gas is about 18% cheaper than a year ago. Food costs continue to remain elevated. The cost of food intended to be consumed at home costs 4.7% more than a year ago, while food consumed at restaurants is up 7.7%.
Falling inflation hasn't come at a cost to workers, either. According to federal data, wages went up 4.4% over the last year. After late 2021 and early 2022, the data shows Americans are regaining some of the buying power they lost in the prior year.