U.S. Price, Wage Hikes Slow; Inflation Cools

Signs that inflation pressures in the United States are steadily easing emerged Friday in reports that consumer prices rose in June at their slowest pace in more than two years and that wage growth cooled last quarter, Christopher Rugaber reported for the Associated Press (AP).

Photo Insert: Employee pay, excluding government workers, rose 1%, down from 1.2% in the first three months of 2023.

A price gauge closely monitored by the Fed rose just 3% in June from a year earlier. That was down from a 3.8% annual increase in May, though still above the Fed’s 2% inflation target.

Prices rose 0.2% from May to June, up slightly from 0.1% the previous month. The cost of some services, though, continued to surge.

Veterinary services, up 0.5% last month, are 10.5% higher than a year ago. And restaurant meal prices increased 0.4% in June; they’re up 7.1% from 12 months earlier.

A separate report Friday from the Labor Department showed that wages and salaries grew slowly in the April-June quarter, thus employers were feeling less pressure to boost pay as the job market cools.

Employee pay, excluding government workers, rose 1%, down from 1.2% in the first three months of 2023. Compared with a year earlier, wages and salaries grew 4.6%, down from 5.1% in the first quarter.

Smaller wage increases should slow inflation over time because companies are less likely to need to raise prices to cover their higher labor costs.

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