On a month-over-month basis, the broadest measure of inflation rose at a pace of 1.3%, inching up from 1.0% in May
By Eugene Onyeji
The U.S. Consumer Price Index for All Urban Consumers (CPI-U) increased 1.3 percent in June the fastest rate since 1981, as Americans grapple with a surge in the cost of gas, food, and shelter, notching the hottest print of the current inflation cycle.
The Bureau of Labor Statistics‘ June Consumer Price Index (CPI) reflected a year-over-year increase of 9.1 percent last month, up from the prior 40-year high of 8.6% in May. The increase was broad-based, with the indexes for gasoline, shelter, and food being the largest contributors.
On a month-over-month basis, the broadest measure of inflation rose at a pace of 1.3%, inching up from 1.0% in May and climbing at a faster tempo than the 1.1% increase economists had projected.
The continued surge in inflation across the U.S. economy was elevated by broad-based increases, including high food costs and record gasoline prices, which topped more than $5 per gallon at the pump last month.
“Core” CPI, which excludes the volatile food and energy components of the report, rose 5.9%, compared to 6.0% in May.
The energy index jumped 41.6 percent over the last year in June, marking the largest 12-month increase since the period ending April 1980. Meanwhile, the component of the report tracking food prices jumped 10.4 percent annually in June, the biggest 12-month increase since the period ending February 1981.
Since this recent peak, however, commodity prices have been under pressure, with crude oil falling more than 8% to below $96 a barrel on Tuesday.
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“Are there any possible reasons for hope on the horizon? There have been some very recent constructive developments on the inflation front, including the decline in gasoline prices and crude oil falling below $100 a barrel,” Bankrate Senior Economic Analyst Mark Hamrick said in a note. “Even so, the national average for regular gas at the pump is up about a dollar and a-half from a year ago, remaining in the mid 4-dollar range.”
In addition to serving as a measure of the costs U.S. consumers dole out for everyday household items, June’s consumer price index comes will be pivotal in guiding Federal Reserve officials on their next policy move as the central bank tightens monetary policy in an effort to restore price stability.
June’s print is likely to prompt policymakers to move forward with another 75 basis points at their next meeting on July 26-27.