Inflation accelerated more than expected to a new four-decade high in June as the price of everyday necessities remains painfully high, exacerbating a financial strain for millions of Americans and worsening a political crisis for President Biden.
The Labor Department said Wednesday that the consumer price index, a broad measure of the price for everyday goods, including gasoline, groceries and rents, rose 9.1% in June from a year ago. Prices jumped 1.3% in the one-month period from May. Those figures were both far higher than the 8.8% headline figure and 1% monthly gain forecast by Refinitiv economists.
It marks the fastest pace of Inflation since December 1981.
So-called core prices, which exclude more volatile measurements of food and energy, climbed 5.9% from the previous year. Core prices also rose 0.7% on a monthly basis – higher than in April and May – suggesting that underlying inflationary pressures remain strong and widespread.
Price increases were extensive, suggesting that inflation may not be near its peak: Energy prices rose 7.5% in June from the previous month, and are up 41.6% from last year. Gasoline, on average, costs 59.9% more than it did one year ago and 11.2% more than it did in May. The food index, meanwhile, climbed 1% in June, as consumers paid more for items like cereal, chicken, milk and fresh vegetables.
In another worrisome sign, shelter costs – which account for roughly one-third of the CPI – sped up again in June, climbing 0.6%, matching an 18-year high set in May. On an annual basis, shelter costs have climbed 5.6%, the fastest since February 1991.
Rent costs also surged in June, jumping 0.8% over the month, the largest monthly increase since April 1986. Rising rents are a concerning development because higher housing costs most directly and acutely affect household budgets.
Another data point that measures how much homeowners would pay in equivalent rent if they hadn't bought their home, also jumped 0.7% in June from the previous month.