US consumer prices did something in June that they haven’t done since the early part of the pandemic: They fell.

Consumer prices dropped 0.1% on a monthly basis, helping to bring the annual rate of inflation to 3% from 3.3% in May, according to the Bureau of Labor Statistics’ latest Consumer Price Index report.

Falling gas prices as well as a drop in new and used car prices helped to usher in the overall decline, which marks the first month-on-month decline since May 2020, BLS data showed.

Economists were expecting a 0.1% monthly increase and an annual gain of 3.1%, according to FactSet consensus estimates.

Excluding energy and food prices, a closely watched “core” index of underlying inflation also slowed more than expected. The core CPI rose 0.1% from May — its slowest pace since August 2021 — nudging the annual rate of core inflation lower, to 3.3% from 3.4%, and marking a fresh three-year low.

US stock futures rose on the news as investors hope the good inflation news will pave the way for the Federal Reserve to lower painfully high interest rates.

Dow futures rose 80 points. S&P 500 futures were 0.3% higher. Nasdaq futures rose 0.3% as well. US Treasury yields fell, which could be good news for consumers: Loans like mortgages and credit card rates are tied to the 10-year yield.

This story is developing and will be updated.

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