US inflation pressures are progressively diminishing, with consumer prices climbing at their slowest level in two years in June.

The figures suggest a “soft landing” for the Federal Reserve’s inflation-fighting efforts.

A Fed-monitored price index jumped 3% in June versus a year earlier, down from May’s 3.8% annual gain but over the Fed’s 2% inflation objective.

Prices grew 0.2% from May to June, up from 0.1%.

Last month’s dramatic drop in year-over-year inflation was due to lower gas and supermarket prices.

However, certain service prices rose, such as movie ticket prices, veterinary services, and restaurant meal costs.

Core prices, which exclude volatile food and energy costs, remained elevated.

The Fed hiked its short-term interest rate to a 22-year high due to persistently strong inflation.

As the employment market cools, wages and salaries expanded more slowly in the April-June quarter, with wages and salaries rising 4.6% year-over-year.

The economy’s resilience and Americans’ spending power are supported by fast-growing average earnings.

Consumer spending rose in June, with consumer sentiment index increasing to its highest level since October 2021.

The Fed’s policymakers worry that the strong economy may fuel inflation, as persistent consumer demand allows more companies to boost prices, putting inflation beyond the Fed’s objective and potentially prompting further rate hikes.