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The US annual inflation rate dropped to 3% in June 2024, its lowest level since June 2023 and below the forecasted 3.1%. This marks the third consecutive month of decline, down from 3.3% in May. The Consumer Price Index (CPI) unexpectedly fell 0.1% month-over-month, the first decline since May 2020, contrary to expectations of a 0.1% rise. This follows a flat reading in May. 

Energy costs played a significant role in the inflation decline. Overall energy price increases slowed to 1% from 3.7%. Gasoline prices fell 2.5%, compared to a 2.2% rise previously, while fuel oil inflation decreased to 0.8% from 3.6%. However, utility gas service accelerated to 3.7% from 0.2%. 

In other sectors, shelter inflation eased to 5.2% from 5.4%, and transportation inflation dropped to 9.4% from 10.5%. Apparel inflation remained steady at 0.8%. New vehicle prices continued to decline (-0.9% vs -0.8%), and used cars and trucks prices fell further (-10.1% vs -9.3%). On the other hand, food inflation slightly increased to 2.2% from 2.1%. 

Core inflation, which excludes volatile food and energy prices, also showed signs of moderation. Annual core inflation decreased to 3.3% from 3.4%, reaching its lowest point since April 2021. The monthly core inflation rate edged down to 0.1% from 0.2%, below the expected 0.2%. These figures suggest a continued trend of moderating inflation in the US economy. 

(United States Inflation Rate，Bureau of Labor Statistics) 

U.S. stocks largely finished lower on Thursday, with a broad sell-off in mega cap stocks driving the decline as investors engaged in profit-taking. The S&P 500 index fell 0.8% after briefly surpassing 5,650 points earlier in the session. The Nasdaq 100 experienced a more significant drop of 1.9%, retreating from a fresh intraday record it had set during trading. In contrast to the overall negative trend, the Dow Jones Industrial Average managed to close slightly higher, adding 32 points by the end of the day. The market’s mixed performance reflects ongoing volatility and investor caution amid high valuations and economic uncertainties. 

(S&P 500 Index Monthly Chart) 

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