Experts had forecast U.S. inflation of 8.8% for June 2022. In fact, however, the figure was significantly higher, thanks to higher gasoline prices. U.S. consumer inflation accelerated to 9.1% in June, the highest number in more than four decades, adding pressure on the Federal Reserve to act more aggressively to raise the interest rates. The consumer-price index’s advance for the 12 months ended in June was the fastest pace since November 1981.
Gasoline prices rose up 11.2% from the previous month and nearly 60% from a year earlier. The energy index rose 7.5 percent over the month and contributed nearly half of the all items increase. Together with housing and food prices, they were the major contributors to the accelerated inflation.
The June inflation exceeded May’s 8.6% rate, which raises the question of whether the Fed would consider a one-percentage-point rate increase rather than a 0.75-point rise later this month. Slowing demand is key to the Fed’s goal of restoring price stability in an economy that is still struggling with supply issues, but raising interest rates also elevates the risk of a recession.
Core prices, which exclude volatile food and energy components, increased by 5.9% in June from a year earlier, slightly less than May’s 6.0% gain, the Labor Department said.
