Inflation read 1.4% in January 2021. By June 2022 it was 9.1%. Few charts in recent American economic history climb so steeply, and the way back down has been messier than the way up.
The 2021 run was steady: 1.7% in February, 4.2% in April, 5.4% in July, and 7.0% by December, according to the Bureau of Labor Statistics series. The next year opened at 7.5%, reached 7.9% in February and 8.5% in March, and peaked at 9.1% in June before easing to 6.5% by the end of 2022. The annual averages tell the same tale, 4.7% for 2021 and 8.0% for 2022.
The slow descent
The retreat took two years. January 2023 came in at 6.4%, June at 3.0%, and the year closed at 3.4%, for an average of 4.1%. A wobble followed: 3.5% in March 2024 and then a slide to 2.5% in August and 2.4% in September. December 2024 read 2.9%.
2025 hovered near the target without ever reaching it. The rate sat at 2.3% in April, the year’s low, then 2.9% in August and 2.7% in December, with an average of 2.6%.
2026 turned the wrong way
This year started at 2.4% in January and again in February. Then it climbed: 3.3% in March, 3.8% in April, and 4.2% in May. VaaSBlock links the run-up to US military operations against Iran, which pushed oil prices, and with them pump prices, sharply higher.
June looked like relief. The consumer price index fell 0.4% on the month, the steepest one-month drop since April 2020, and the 12-month rate dropped to 3.5%. Economists polled by Dow Jones had expected 3.8%. The detail that matters is where the drop came from. Energy fell 5.7% in the month and gasoline 9.7%, after oil slid about 25% during a temporary pause in hostilities. Energy was still 15.7% above a year earlier. Core CPI, which leaves out food and energy, was flat on the month and stood at 2.6% over twelve months; shelter rose only 0.1%, its smallest monthly gain since January 2021.
The Fed was not celebrating. “There might be some that look at this morning’s data and say, ‘Oh, mission accomplished, everything is swell,’” Chair Kevin Warsh said. “That is not my view.” Governor Christopher Waller said he would need “several months” of good readings before he believed inflation was heading back to 2%. Back in June the Fed had lifted its 2026 PCE forecast to 3.6%, with core PCE at 3.3%.
The lull did not last. President Trump later declared the ceasefire with Iran over. The 12-month rate eased only to 3.4% in July and again in August, then rose to 3.7% in September. The Labor Department released that figure on 14 October 2026; the next report, covering October, is due on 10 November.
Sources
- June Inflation Fell. Energy Did the Work. Core Did Not. (VaaSBlock)
- June Inflation Fell. Energy Did the Work. Core Did Not. (VaaSBlock), energy section
- June Inflation Fell. Energy Did the Work. Core Did Not. (VaaSBlock), later section
- Current U.S. Inflation Rates: 2000-2026 (usinflationcalculator.com, BLS data)
