Updated on: July 14, 2026 / 9:16 AM EDT / CBS News

Price growth moderated more than anticipated during June, falling to a yearly pace of 3.5 percent from 4.2 percent the prior month thanks to cheaper fuel, Labor Department figures showed on Tuesday.

By the numbers

Analysts surveyed by FactSet had forecast a 3.9 percent annual increase for June.

The softer outcome followed three straight months of acceleration that lifted the CPI to its highest mark in over three years. Cooling stemmed largely from lower energy costs, as pump prices plunged 9.7 percent month over month.

That drop marked the steepest single-month decline since April 2020, the Bureau of Labor Statistics noted.

With oil and gasoline values sliding in June and early July, May could mark the high point for inflation this year, Oxford Economics stated in a July 14 report.

The CPI measures price shifts across a typical consumer basket of goods and services.

Core CPI, stripping out volatile food and energy items, advanced at a 2.6 percent annual rate, easing from 2.9 percent in May and missing forecasts.

The milder inflation print arrived after the U.S. and Iran reached a memorandum of understanding last month that launched a 60-day truce in the conflict.

Yet frictions between the nations have intensified again amid competition for influence over the Strait of Hormuz.

"A serious re-escalation of the conflict would threaten to revive the key upside risk to inflation and raise the odds of rate hikes," Goldman Sachs analysts wrote in a note ahead of the release.

What experts are saying

Analysts warned that the latest CPI reading does not capture the recent climb in energy prices tied to renewed strains between Washington and Tehran.

On Tuesday Brent crude, the global benchmark, climbed to a one-month peak above $86 per barrel after President Trump indicated the U.S. would restore a military blockade of the Strait of Hormuz and add a 20 percent charge on vessels passing through.

The nationwide average gasoline price stood at $3.86 per gallon on Tuesday, per AAA, down from a May peak above $4.50 yet still higher than the sub-$3 level seen before the conflict began.

"Oil and gasoline prices - the main reason inflation eased in June - have started to edge back up on renewed US-Iran tensions, but the CPI won't reflect this for another month," Nic Puckrin, a markets specialist and ex-Goldman Sachs analyst, said via email.

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