By Ethan Faverino |

Consumer prices declined on a month-to-month basis in June while annual inflation continued to moderate, according to the Joint Economic Committee’s latest Monthly Inflation Update.

The report found that the Consumer Price Index for All Urban Consumers (CPI-U), the government’s primary measure of inflation, fell 0.42% from May to June. On an annual basis, consumer prices were 3.53% higher than in June 2025, down from the 4.25% year-over-year inflation rate recorded in May.

Core inflation, which excludes the more volatile food and energy categories, also eased. Core CPI declined 0.02% during June and increased 2.59% over the past 12 months, marking a slowdown from the previous month’s annual rate of 2.85%.

Energy prices were a major factor in the monthly decline. The energy index fell 5.71% in June after increasing 3.88% in May. Despite the monthly decrease, energy prices remained 15.70% higher than a year ago.

Food prices continued to rise modestly, increasing 0.21% during the month and 3.01% over the past year.

Inflation continued to vary across the country. The Northeast recorded the highest annual headline inflation rate at 4.3%, followed by the Midwest at 3.8%. The South and West each posted annual inflation rates of 3.2%

The June report also showed that workers experienced modest gains in purchasing power as inflation-adjusted wages increased. Real average weekly earnings for all private-sector employees rose 0.77% from May, while real average hourly earnings increased 0.80%.

For production and nonsupervisory employees, real average weekly earnings increased 0.55% and real average hourly earnings rose 0.81%.

The Joint Economic Committee noted that “real” earnings reflect wages after adjusting for inflation making them a better indicator of workers’ purchasing power. Weekly earnings are considered a more comprehensive measure of income because they account for changes in both hourly pay and hours worked.

The report also showed inflation came in below expectations. According to forecasts from the Cleveland Federal Reserve, economists had projected monthly headline inflation of a 0.06% decline and annual inflation of 3.92%. Instead, headline CPI fell 0.42% in June and the annual rate registered 3.53%, indicating inflation cooled more than anticipated.

Compared with June 2025, annual inflation remained elevated but continued its gradual moderation. Headline inflation stood at 3.53%, food inflation at 3.01%, core inflation at 2.59%, and energy prices remained the fastest-growing component, rising 15.70% over the past year despite their sharp monthly decline.

Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.