WASHINGTON (NEWSnet/AP) — Inflation in the United States cooled in June for a third straight month, a sign that the worst price spike in four decades is steadily fading and may soon usher in interest rate cuts by the Federal Reserve.

In a better-than-expected report from the government, consumer prices declined 0.1% from May to June after having remained flat the previous month, the government reported Thursday. Then measured from 12 months earlier, prices were up 3% in June, down from 3.3% in May.

The latest inflation readings could help convince the Fed’s policymakers that inflation is returning to its 2% target. Should inflation remain low through the summer, many economists expect the Fed to begin cutting its benchmark rate in September.

Even as inflation slows, though, the costs of food, rent, health care and other necessities remain much higher than they were before the pandemic — a source of public discontent.

Other measures suggest that the economy is healthy, though slowing: Unemployment is still relatively low, hiring remains steady and many consumers continue to travel, eat out and spend on entertainment.

In testimony Tuesday to Congress, Fed Chair Jerome Powell noted that the job market has “cooled considerably” and is “not a source of broad inflationary pressures.”

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