US inflation rose to a new high of 9.1 percent in June, putting further pressure on American families and increasing pressure on President Joe Biden, whose ratings have been battered by the incessant rise in prices.
Government data released on Wednesday showed a sharp, faster-than-expected month-on-month rise in the consumer price index, driven by a sharp rise in gasoline prices.
The 9.1 percent CPI spike in the trailing 12 months to June was the fastest rise since November 1981, the Labor Department reported.
Energy contributed half of the monthly gain as gasoline rose 11.2 percent in June and a staggering 59.9 percent last year. Total energy prices recorded their largest annual increase since April 1980.
The war in Ukraine has pushed up global energy and food prices, and US gas prices at the pump hit a record more than $5 a gallon last month.
However, energy prices have eased in recent weeks, which could provide some relief for consumers.
But the Federal Reserve is likely to continue its aggressive rate hikes as it seeks to contain inflation by cooling demand before inflation solidifies.
The Federal Reserve last month carried out the largest rate hike in almost 30 years, and economists say another three-quarter-point hike later this month is likely.
Ian Shepherdson of Pantheon Macroeconomics summed up the data in one word: “Ouch.”
“This report is going to make the Fed very uncomfortable reading,” he said. “It rules out the chance that the Fed will hike just 50 basis points this month.”
– Signs of cooling? –
Driven by record-high gasoline prices, the consumer price index rose by 1.3 percent in June.
But Shepherdson noted some signs of falling prices in the data and predicted that “this will be the last big rise”.
When volatile food and energy prices are factored out of the calculation, “core” CPI rose 5.9 percent last year — still a fast pace but slowing from May’s pace, according to the data.
Food and house prices rose in June, as did car prices, although the rate has stabilized or slowed from last month, the report said.
The White House came out ahead of the report and predicted it would show “sharp elevated” inflation.
But spokeswoman Karine Jean-Pierre noted that the “reverse inflation data” did not take into account the recent drop in gasoline prices.
According to AAA, the national median price at the pump had fallen to $4.63 a gallon from $5.01 a month ago.
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