Inflation rose 9.1% in June, even more than expected, as price pressures mount

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Shoppers paid sharply higher prices for a variety of goods in June as inflation gripped the slowing US economy, the Bureau of Labor Statistics reported Wednesday.

The consumer price index, a broad measure of everyday goods and services, rose 9.1% from a year ago, above the 8.8% Dow Jones estimate. That marked another month with the highest inflation rate, dating back to December 1981.

Excluding volatile food and energy prices, the so-called core CPI rose 5.9%, compared to the estimate of 5.7%.

On a monthly basis, aggregate CPI increased by 1.3% and core CPI by 0.7%, compared to estimates of 1.1% and 0.5%, respectively.

Taken together, the numbers seemed to disprove the story that inflation could peak as gains were based on different categories.

Energy prices rose 7.5% during the month and rose 41.6% on a 12-month basis. The food index was up 1%, while the cost of shelter, which accounts for about a third of the CPI, was up 0.6% this month and up 5.6% a year. This was the sixth straight month that home food increased by at least 1%.

Rental costs 0.8% in June, the largest monthly increase since April 1986, according to the BLS.

Stock market futures slumped after the data, while government bond yields rose.

Much of the inflation increase came from gasoline prices, which rose 11.2% over the month and only 60% for the 12-month period. Electricity costs increased by 1.7% and 13.7% respectively. The prices of new and used vehicles increased by 0.7% and 1.6% respectively.

Medical care costs increased 0.7% over the month, driven by a 1.9% increase in dental services, the industry’s largest-ever monthly change in data dating back to 1995.

Airfares were one of the few areas to see a decline, falling 1.8% in June but still up 34.1% from a year ago. The meat, poultry, fish and eggs category also fell 0.4% this month, but is up 11.7% year-on-year.

The increases marked another difficult month for consumers, who have suffered from rising prices on everything from airline tickets to used cars to bacon and eggs.

Policymakers have struggled to respond to a situation rooted in multiple factors, including congested supply chains, over-demand for goods over services and trillions of dollars in Covid-related stimulus spending that leaves consumers both awash with cash and confronted. were holding the highest prices since the early days of the Reagan administration.

Federal Reserve officials have implemented a series of rate hikes that have pushed short-term borrowing benchmark costs up 1.5 percentage points. The central bank is expected to continue to hike until inflation moves closer to its longer-term target of 2%.

White House officials have attributed the price hike to Russia’s invasion of Ukraine, although inflation was already aggressively rallying before that attack in February. President Joe Biden has called on gas station owners to cut prices.

The government and leading Democrats have also blamed what they call greedy corporations for using the pandemic as an excuse to raise prices. However, corporate profits have increased by just 1.3% overall since the second quarter of 2021, when inflation picked up.

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