Inflation fell in June after short-lived Iran deal brought energy prices down

News Inflation fell in June after short-lived Iran deal brought energy prices down Comments: by Sylvan Lane - 07/14/26 8:45 AM ET Comments: Link copied by Sylvan Lane - 07/14/26 8:45 AM ET Comments: Link copied

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Inflation fell in June after a deal between the U.S. and Iran, which has since fallen apart, brought a temporary decline in energy prices.

The consumer price index (CPI) fell 0.4 percent in June, according to data released Tuesday by the Bureau of Labor Statistics, which said it was the largest single-month price drop since the onset of the coronavirus pandemic in April 2020.

Energy prices were down 5.7 percent in June, which wiped out increases in food and shelter prices, the BLS said. The annual inflation rate also dropped from 4.2 percent in May to 3.5 percent in June, and from 2.9 percent in May to 2.6 percent in June when excluding food and energy prices.

The June inflation decline exceeded the expectations of economists, who expected an annual inflation rate of 3.8 percent after a 0.1 percent decline in monthly prices, according to consenssus estimates.

Even so, the price relief Americans felt in June is likely to fade after the collapse of the deal between the U.S. and Iran to end military hostilities.

The U.S. and Iran are once again fighting over control of the Strait of Hormuz, which would once again choke off much of the global supply of oil and cause prices to rise quickly rebound.

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