US inflation surged to a fresh peak of 9.1 per cent in June, further squeezing American families and heaping pressure on President Joe Biden, whose ratings have taken a battering from the relentless rise in prices.
Government data released Wednesday showed a sharp, faster-than-expected increase in the consumer price index from the previous month, driven by significant increases in gasoline prices.
The 9.1 per cent CPI spike over the past 12 months to June was the fastest increase since November 1981, the Labor Department reported.
Energy contributed half of the monthly increase, as gasoline jumped 11.2 per cent in June and a staggering 59.9 per cent over the past year. Overall, energy prices posted their biggest annual increase since April 1980.
The war in Ukraine has pushed global energy and food prices higher, and US gas prices at the pump last month hit a record of more than $5 a gallon.
However, energy prices have eased in recent weeks, which could start to relieve some of the pressure on consumers. Even so, the Federal Reserve will likely continue its aggressive interest rate increases as it tries to tamp down the price surge by cooling demand before inflation becomes entrenched.
The US central bank last month implemented the biggest rate hike in nearly 30 years, and economists say another three-quarter-point increase is likely later this month.
Factors Contributing to the High Inflation in the US
Energy prices surged 7.5% on the month and were up 41.6% on a 12-month basis. The food index increased 1%, while shelter costs, which make up about one-third of the CPI rose 0.6% for the month and were up 5.6% annually. This was the sixth straight month that food at home rose at least 1%.
Rental costs rose 0.8% in June, the largest monthly increase since April 1986, according to the BLS.
Stocks mostly slumped following the data while government bond yields surged.
Much of the inflation rise came from gasoline prices, which increased 11.2% on the month and just shy of 60% for the 12-month period. Electricity costs rose 1.7% and 13.7%, respectively. New and used vehicle prices posted respective monthly gains of 0.7% and 1.6%.
Medical-care costs climbed 0.7% on the month, propelled by a 1.9% increase in dental services, the largest monthly rise ever recorded for that sector in data that goes back to 1995.
Airline fares were one of the few areas seeing a decline, falling 1.8% in June though still up 34.1% from a year ago. The meat, poultry, fish and eggs category also dropped 0.4% for the month but is up 11.7% annually.
The increases marked another tough month for consumers, who have been suffering through soaring prices for everything from airline tickets to used cars to bacon and eggs.