US Consumer prices skyrocketed to 9.1%, the biggest 12-month increase since 1981, and up from an 8.6% jump in May.
This was disclosed today by the U.S Bureau of Labor Statistics. On a monthly basis, prices rose 1.3% from May to June, another substantial increase, after prices had jumped 1% from April to May.
Inflation in the United States reached a new four-decade high in June as a result of rising gas, food, and rent prices. This puts additional pressure on households and likely sealed the Federal Reserve’s decision to raise interest rates significantly once more, leading to higher borrowing costs.
What the report is saying
- The report said, “The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.3 percent in June on a seasonally adjusted basis after rising 1.0 percent in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 9.1 percent before seasonal adjustment.”
- June’s surge again was led by gasoline prices, which increased 11.2% and 59.9% annually. Grocery prices rose 1% and 12.2% over the past 12 months. Both gas and food costs have been elevated largely because Russia’s war in Ukraine has disrupted global supplies of oil, wheat, corn and other commodities.
- The report added, “The all items index increased 9.1 percent for the 12 months ending June, the largest 12-month increase since the period ending November 1981. The all items less food and energy index rose 5.9 percent over the last 12 months. The energy index rose 41.6 percent over the last year, the largest 12-month increase since the period ending April 1980. The food index increased 10.4 percent for the 12-months ending June, the largest 12-month increase since the period ending February 1981. “
The persistence of high inflation has unnerved Chair Jerome Powell and other Fed officials, who are engaged in the fastest series of rate hikes since the late 1980s to try to slow the price spikes. The central bank is expected to raise its key short-term rate later this month by hefty three-quarters of a point, as it did last month, with potentially more large rate hikes to follow.