According to the Labor Department, the CPI increase of 9.1% in the last 12 months from June was the fastest increase since November 1981.
WASHINGTON: US inflation hit a record high of 9.1 percent in June, further squeezing American households and putting pressure on President Joe Biden, whose approval rating has been hit by a steady rise in prices.
Government data released on Wednesday showed a sharp, faster-than-expected rise in the consumer price index compared to May due to a sharp rise in petrol prices.
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Energy accounted for half of the monthly increase, as petrol rose 11.2 per cent last month and a staggering 59.9 per cent year-on-year. Gross energy prices rose the most annually since April 1980.
While acknowledging the “unacceptably high” rate of inflation, Biden argued that it was also “outdated” because it did not reflect a clear drop in energy prices since mid-June.
The president said in a statement that the recent fall in prices has “provided an important place for American families to breathe. And, since the report, prices of other commodities, such as wheat, have fallen sharply.”
Insisting that tackling inflation is a top priority, Biden acknowledged that his administration “needs to make more progress, more quickly, to control inflation.”
The war in Ukraine has pushed up energy and food prices globally, and last month US gas prices at the pump hit a record 5 per gallon.
However, energy prices have eased in recent weeks, which may begin to ease some of the pressure on consumers.
But it is likely that the Federal Reserve will continue to raise its interest rates aggressively as it seeks to reduce inflation by cooling demand before inflation picks up.
The US Federal Reserve last month posted the biggest rate hike in nearly 30 years, and economists say another three-quarters increase is expected later this month.
Ian Shepherdson of Pantheon Macroeconomics summed up the data in one word: “Och.”
Signs of cooling?
The Consumer Price Index rose 1.3% in June due to record high petrol prices.
But Shepherdson noted some signs of cooling prices in the data and predicted that “this will be the last major increase.”
When volatile food and energy prices are taken into account, the “basic” CPI rose 5.9% year-on-year – still a fast but slower pace in May, according to the data. in accordance.
Food and housing prices also rose in June, as did car prices, although rates have stabilized or slowed over the past month, the report said.
The White House had predicted before the report that it would show “extremely high” inflation.
But Press Secretary Karen Jean-Pierre noted that “backward-looking inflation figures” do not reflect the recent decline in petrol prices.
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