The United States economy suffered another major blow in June with new data showing inflation rising 9.1% compared to the same period last year, the biggest increase since 1981.
Economists predicted an increase of 8.8%.
“The consumer price index, a broad measure of everyday goods and services related to the cost of living, soared 9.1% from a year ago, above the 8.8% Dow Jones estimate. That marked another month of the fastest pace for inflation going back to November 1981,” reports CNBC.
“CPI delivered another shock, and as painful as June’s higher number is, equally as bad is the broadening sources of inflation,” explained Robert Frick, an economist at Navy Federal Credit Union. “Though CPI’s spike is led by energy and food prices, which are largely global problems, prices continue to mount for domestic goods and services, from shelter to autos to apparel.”
“U.S. inflation is above 9%, but it is the breadth of the price pressures that is really concerning for the Federal Reserve.” James Knightley, ING’s chief international economist, told CNBC. “With supply conditions showing little sign of improvement the onus is the on the Fed to hit the brakes via higher rates to allow demand to better match supply conditions. The recession threat is rising.”
The Biden administration had previously labeled the country’s staggering inflation crisis as a “temporary” reaction to the Covid-19 pandemic.
Read the full report here.