What a difference a year makes.

US annual inflation slowed to 3% last month, according to the latest Consumer Price Index released Wednesday by the Bureau of Labor Statistics.

That's a sharp cooldown from June last year, when inflation spiked to 9.1% — the fastest annual rate since November 1981, when Olivia Newton-John's "Physical" sweated its way to the top of the charts.

It's the 12th consecutive month that annual inflation, as measured by the CPI, has slowed. The annual rate is down from 4% in May and landed slightly below economist expectations for a 3.1% increase, according to Refinitiv.

Shelter costs — which is largely a measurement of rental leases as the implicit rental value of owner-occupied properties — accounted for 70% of the increase for June, according to the BLS.

On a monthly basis, prices increased by 0.2%, a cooler reading than the 0.4% increase seen in May, according to the report.

Since March 2022, the Federal Reserve rolled out 10 consecutive interest rate hikes to tame inflation, finally hitting the pause button last month. The Fed is widely expected to raise rates by another quarter point when it meets later this month.

Underlying inflation cooled as well. The core CPI index, which strips out the volatile categories of food and energy, increased 4.8% for the 12 months ended in June. That's a retreat from the 5.3% rate in May and the 5% predicted by economists.

From May, the core CPI ticked up 0.2%, a cooler monthly rate than the 0.4% seen in May.

This story is developing and will be updated.