Declines in used car and gasoline prices help ease U.S. inflation

used car and gasoline

WASHINGTON — Inflation in the United States has reached its lowest point in over two years — 3% in June compared to the previous year — thanks to easing prices for gasoline, airline fares, used cars, and groceries. Used car prices dropped 0.5% from May to June after experiencing significant spikes. Prices of used electric vehicles (EVs) have also fallen, with a study showing a 29.5% drop. Auto insurance costs, however, have risen by an average of 17% in the past year.

Gasoline prices have fallen to an average of $3.50 per gallon nationally, down from a peak of $5 last year. The Federal Reserve is expected to raise its benchmark rate despite the positive inflation data, but many economists believe they may hold off on a rate hike in September if inflation continues to cool.

Excluding volatile food and energy prices, core inflation rose by just 0.2% from May to June, the smallest increase in nearly two years. Some economists speculate that if inflation continues to slow and the economy shows signs of cooling, the July increase could be the last. Grocery prices are rising more slowly, with certain categories seeing declines. 

Services like restaurant meals, child care, and dental services continue to experience rapid price increases.

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