Here’s the inflation breakdown for June 2024 — in one chart

Inflation fell further in June as lower gasoline prices combined with other easing price pressures to bring relief for consumers’ wallets.

The consumer price index, a key inflation gauge, rose 3% in June from a year ago, down from 3.3% in May, the U.S. Department of Labor reported Thursday.

The CPI gauges how fast prices are changing across the U.S. economy. It measures everything from fruits and vegetables to haircuts, concert tickets and household appliances.

Perhaps the “most encouraging” news for consumers is that inflation for household necessities has cooled dramatically, said Mark Zandi, chief economist at Moody’s Analytics.

“The prices for staples — food at home, gasoline, new-lease rents — they haven’t changed in about a year,” Zandi said. “So people are paying the same for those staples today that they were a year ago.”

The April inflation reading is down significantly from its 9.1% pandemic-era peak in 2022, which was the highest level since 1981.

However, it remains above policymakers’ long-term target, around 2%.

“We continue to expect inflation to grind lower in the months ahead as input cost pressures ease and more tepid consumer demand makes it harder [for businesses] to raise prices,” Sarah House and Aubrey George, economists at Wells Fargo Economics, wrote in a note this week.

However, additional improvements are likely to be “slow-going,” they wrote.

The U.S. Federal Reserve uses inflation data to help guide its interest rate policy. It raised interest rates to their highest level in 23 years during the Covid-19 pandemic era, pushing up borrowing costs for consumers and businesses in a bid to tame inflation.

Last month, Fed officials forecast they would start cutting rates by the end of 2024.

“All indications are inflation has moderated, is back close to the Fed’s target and consistent with a rate cut in September,” Zandi said.

There has also been a broad pullback in prices at the grocery store.

“Food at home” prices have risen just 1.1% since June 2023, according to CPI data.

Consumers have more “breathing room” at the store amid “growing promotional activity” among retailers, while a few “major” companies recently announced price cuts “that are likely to pressure competitors’ pricing,” wrote economists House and George.

While annual data on inflation trends is helpful, economists generally recommend looking at monthly numbers as a better guide of short-term movements and prevailing trends.

They also generally like to examine “core” inflation readings. They strip out food and energy prices, which can be volatile from month to month.

The monthly core CPI reading was 0.1% in June, the smallest increase in about three years, since August 2021. It has declined for three consecutive months, from 0.4% in March. To get back to target, economists say the monthly reading should…