Inflation hits another 40-year high. What does that mean for shoppers and the next Fed rate hike?
The cost of petrol, food, and rent continued to rise in June, driving inflation up once again to a 40-year high and presumably reinforcing the Federal Reserve's decision to make another significant rate hike this month.
The Labor Department's Consumer Price Index revealed on Wednesday that prices rose 9.1 percent from a year earlier, up from an annual rate of 8.6 percent the previous month and the highest increase since November 1981.
Economists surveyed by Bloomberg had estimated inflation would rise to 8.8%.
Consumer prices rose by 1.3 percent on a monthly basis, the biggest increase of this kind since 2005, as opposed to a 1 percent gain in May.
Gasoline prices, rose 59.9 percent yearly and 11.2 percent over the previous month to lead June's jump.
However, according to Pooja Sriram, an economist at Barclays, increasing fertilizer costs for farmers might maintain relatively high grocery prices all year long.
Prices for bacon dropped 1.9 percent, marking the second consecutive significant monthly reduction. Additionally, prices for meat and veal dropped by 2.3%.
In June, cereal prices rose 2.5% from the prior month and 14.2% from a year ago.
Due to people moving into their own flats after staying with family members during the pandemic, rent increased by 0.8 percent per month and 5.8 percent over the previous year.
"This will be the last big increase," Shepherdson of Pantheon Macroeconomics says.