The headline writers got their first monthly CPI decline since April 2020 and immediately reached for the confetti. June CPI fell 0.4%, largely because energy dropped 5.7%. Meanwhile, the annual price level rose 3.5%, food rose 3.0%, shelter rose 3.3%, and energy remained 15.7% higher than a year ago. One cheaper month at the gas pump does not repair seventy-five years of compounding fiat fuckery.
Inflation has now exceeded 2% in every published monthly reading since March 2021, except for once when the government shutdown prevented the publishing of that metric in October of 2025. The Fed formally targets PCE, so CPI is an imperfect comparison, but 3.5% is still 75% above the familiar 2% benchmark. The honest headline is simple: June brought relief from a brutal energy spike while the dollar continued losing purchasing power. A falling monthly rate is welcome. It does not make the previous price increases disappear.
Oh, and if energy was the main input to reducing CPI last month, let’s not worry about the fact that oil is bid again because “the Strait that was never closed is closed again, but this time it’s because we said so and we’re definitely in charge and winning but also this isn’t a war and we don’t need the Strait to open, but even still it is definitely open but not for Iran even though they are the ones that closed it.” It’s all so tiresome.