After peaking at 9.1% a year ago, U.S. inflation has decreased by two-thirds. However, reducing yearly consumer price rises to the federal government’s desired 2% will be harder.

In June, flat grocery prices somewhat offset a rise in fuel prices and still-high rent increases, lowering inflation for the 12th straight month. The Federal Reserve’s preferred measure, core inflation, fell more than predicted.

According to the consumer price index of the Labor Department, consumer prices rose 3% from a year ago, down from 4% in May. This represents the smallest annual increase since March 2021. Prices jumped 0.2% after 0.1% in May.

According to a letter that Contingent Macro Research issued to its customers, “generally speaking, while pockets of core price pressures still exist, critical categories of inflation are slowly cooling.”

As supply chain issues brought on by the epidemic have subsided, prices for used vehicles and other products have been rising more slowly or even decreasing.

As salaries have risen due to COVID-19 labor shortages, services like haircuts and vehicle repairs have continued to rise sharply.