---
title: "U.S. Inflation Trends Show Easing, With Implications for Memphis"
url: https://www.herememphis.com/2026/08/12/memphis-inflation-trends-show-easing-implicat/
date: 2026-08-12T13:50:48+00:00
modified: 2026-08-12T13:50:48+00:00
author: "Marcelino Esquivel"
categories: ["National"]
site: "HEREMemphis"
attribution: "HEREMemphis"
---

# U.S. Inflation Trends Show Easing, With Implications for Memphis

*Source: [HEREMemphis](https://www.herememphis.com/2026/08/12/memphis-inflation-trends-show-easing-implicat/) — August 12, 2026 by Marcelino Esquivel*

The annual inflation rate in the United States decreased to 3.5 percent in June 2026, marking a notable reduction from the 4.2 percent recorded in May. This trend is expected to continue, with forecasts indicating a further easing to 3.4 percent for July 2026.

While the annual rate shows a consistent decline, monthly consumer price index (CPI) figures present a more dynamic picture. After a 0.4 percent decline in June, the monthly CPI is forecast to rise by 0.1 percent in July. This slight rebound suggests that while the overall pace of price increases is slowing year-over-year, month-to-month fluctuations remain part of the economic landscape.

Core consumer prices, which exclude the often-volatile categories of food and energy, are also projected to show continued moderation. Annual core inflation eased to 2.6 percent in June and is expected to further decrease to 2.5 percent in July. The monthly increase for core consumer prices is forecast at 0.2 percent for July. This metric is closely watched by economists as it provides insight into underlying inflationary pressures, less influenced by short-term swings in commodity markets.

An examination of the individual components contributing to the June 2026 inflation rate reveals significant disparities. Energy inflation stood at a robust 15.7 percent, indicating that costs for fuel, electricity, and other energy sources continued to rise sharply. In contrast, food inflation was 3.0 percent, shelter inflation was 3.3 percent, and services inflation (excluding energy services) was 3.2 percent. These figures highlight that while some sectors are experiencing more moderate price increases, the energy sector continues to exert upward pressure on overall costs.

The Consumer Price Index for All Urban Consumers (CPI-U) serves as the primary measure for these inflation rates. In June 2026, the unadjusted CPI index was 333.95 points, a decrease from 335.12 points in May. Core consumer prices, similarly, saw a slight dip, moving from 336.12 points in May to 336.07 points in June. These index values reflect the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

The composition of this market basket is crucial to understanding how inflation impacts different aspects of daily life. The CPI-U assigns weights to various categories: food accounts for 14 percent, energy for 8 percent, commodities less food and energy commodities for 21 percent, and services less energy services for the largest share at 57 percent. This weighting means that changes in service prices have the most significant impact on the overall inflation rate, followed by commodities, food, and then energy.

Putting current trends into historical context provides a broader perspective. From 1914 through 2026, the U.S. inflation rate averaged 3.29 percent. The current 3.5 percent rate in June, while higher than this long-term average, is significantly below historical extremes. The all-time high for U.S. inflation was a staggering 23.70 percent in June 1920, a period marked by the economic boom and subsequent bust following World War I. Conversely, the record low was -15.80 percent in June 1921, reflecting a sharp deflationary period in the immediate post-war recession. These historical figures underscore the volatility that economic conditions can introduce into price stability over time.