(CNN) – U.S. inflation surged in June and reached a new pandemic-era high, with consumer prices rising 9.1% year-on-year, according to new data released Wednesday by the Bureau of Labor Statistics.
This is the highest level in more than 40 years and higher than before, when prices rose 8.6% in the year to May. The number is also well above the 8.8% economists had expected, according to Refinitiv.
The June Consumer Price Index (CPI) also showed that total costs paid by consumers for a range of goods and services rose 1.3% from May to June.
Much of the increase in June is due to higher gasoline prices, which are up about 60% for the year. Americans faced record fuel costs last month, with the national average exceeding $5 a gallon nationwide.
Electricity and natural gas prices also rose by 13.7% and 38.4%, respectively, in the twelve-month period ending in June. Overall, energy prices are up 41.6% year over year.
However, increases were observed in all groups. Household food prices rose 12.2% over the year: grain 12.2%, dairy 13.5%, and meat 13.8%.
Excluding food and energy costs, which tend to represent temporary fluctuations, prices in the core CPI rose 0.7% in the same period and 5.9% in the 12-month period ending in June.
Biden says inflation figure is ‘unacceptably high’ and ‘outdated’
US President Joe Biden described the CPI number as “unacceptably high” but said it was “also outdated”. In this sense, he explained that gasoline prices have fallen in the past 30 days.
“Energy alone accounts for nearly half of the monthly increase in inflation. Today’s data does not reflect the full impact of the nearly 30-day drop in gasoline prices, which has cut costs at gas stations by about 40 cents since mid-June. These savings provide significant space. Breathing for American households. Other commodities such as wheat have fallen sharply since this report.”
He stressed that facing inflation is his “top priority.”
Earlier this week, the White House had already stated that it was expecting “very high” inflation data, citing the continuing impact of Russia’s invasion of Ukraine.
For its part, the Federal Reserve also pays close attention to these fundamental data when assessing future inflationary trends. The latest figures are likely to give the central bank the green light to continue its aggressive series of rate hikes to bring down rates. The Fed is expected to raise the benchmark interest rate by at least 75 basis points at its next policy meeting on July 26-27.
With information from Ally Malloy