U.S. Inflation Hit A 40-Year High of 9.1% In June

U.S. inflation hit a 40-year high of 9.1% in June, adding to financial stress for millions of Americans, as prices for daily necessities remained high, Fox News reported on July 13. The Labor Department said Wednesday that the consumer price index, a broad measure of the price of everyday goods including gasoline, groceries, and rent, rose 9.1% in June from a year earlier.

However, the wide range of price increases suggests inflation may not be near its peak. Among them, the average price of gasoline in June was 59.9% higher than a year ago, the food index climbed 1% in June, and consumers paid more for items such as cereals, chicken, milk, and fresh vegetables.

In another worrying sign, housing costs, which make up about a third of the CPI, accelerated again in June, and rental fees also climbed sharply, the most significant monthly increase since April 1986. Stocks fell after the report, while government bond yields jumped. Severe inflation has put a financial strain on most American households, who are forced to pay more for necessities like food, gas, and rent. Americans see inflation as the country’s biggest problem, with many households blaming the current president’s aggressive policies for soaring prices.

However, most economists now agree that unprecedented government stimulus due to the coronavirus pandemic is to blame. RSM chief economist Joe Brusuelas said inflation continued to expand, and core price gains meant the Fed needed to take a robust and sustained move to raise interest rates that could tip the economy into recession early next year.