US inflation reaches record levels not seen in 40 years

In June, inflation in the US reached record levels not seen in 40 years, placing its annual rate at 9.1%, which translated into a sharp increase in consumer prices, mainly for gasoline and energy.

In June, inflation in the United States broke a new record in the last forty years by placing its year-on-year rate at 9.1%, according to data published this Wednesday by the Bureau of Labor Statistics (BLS).

Government data released on Wednesday showed a faster-than-expected rise in the consumer price index compared to May, fueled by significant increases in gasoline prices.

The 9.1 percent rise in the CPI for the last 12 months through June was the fastest rise since November 1981, the Labor Department reported.

Energy contributed half of the monthly increase, with gasoline rising 11.2 percent last month and a staggering 59.9 percent over the past year. General energy prices recorded their biggest annual increase since April 1980.

While he acknowledged that the inflation rate was "unacceptably high," Biden argued that it was also "out of date" as it did not reflect a clear drop in energy prices since mid-June.

The recent price drop provided “important breathing space for American families. And other commodities like wheat have fallen considerably since this report," the president said in a statement.

Insisting that tackling inflation was the top priority, Biden admitted his administration needed to "move further, faster, to rein in price increases."

The war in Ukraine has pushed up global energy and food prices, with US gasoline prices hitting a record high of more than $5 a gallon last month.

However, energy prices have eased in recent weeks, which could begin to ease some of the pressure on consumers.

But the Federal Reserve is likely to continue its aggressive interest rate hikes as it tries to rein in rising prices by cooling demand before inflation takes hold.

The US central bank last month implemented the biggest rate hike in nearly 30 years, and economists say another three-quarter-point hike is likely later this month.

Signs of cooling?

Buoyed by record gasoline prices, the consumer price index rose 1.3 percent in June.

When volatile food and energy prices are factored out of the calculation, the "core" CPI rose 5.9 percent over the past year, a pace still brisk but slowing from May's pace, according to analysts. data.

Food and house prices also increased in June, as did car prices, although the rate either stabilized or declined from last month, according to the report.

The White House anticipated the report to predict that it would show "highly elevated" inflation.

But press secretary Karine Jean-Pierre noted that the "backward-looking inflation data" does not take into account recent drops in gasoline prices.

According to AAA, the national average price at the pump is down to $4.63 a gallon, from $5.01 a month ago.