U.S. consumer inflation in June surged 9.1 percent from a year ago, hitting a fresh four-decade high, the U.S. Labor Department reported Wednesday.
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The consumer price index (CPI) rose 1.3 percent from May to June after increasing 1.0 percent from April to May, according to Bureau of Labor Statistics. The June CPI marks the largest 12-month increase since the period ending November 1981, and up from an 8.6 percent jump in May.
Headline CPI has remained over 6 percent year-on-year since October last year, and the figure has been over 8 percent since March this year, a stark reminder that the Fed has a long way to go to bring elevated inflation under control.
The central bank raised its target federal funds rate by a quarter percentage point from near zero in March, beginning its tightening cycle to curb surging inflation. In May, the Fed increased the rate by half a percentage point. It hiked the rate by three-quarters of a percentage point in June, the most aggressive hike since 1994.
The so-called core CPI, which excludes food and energy, rose 0.7 percent in June following a 0.6-percent bump the prior month. Core CPI jumped 5.9 percent over the last 12 months after climbing 6.0 percent in May.
While almost all major component indexes rose over the month, the largest contributors were the indexes for shelter, used cars and trucks, medical care, motor vehicle insurance and new vehicles. The energy index rose 7.5 percent over the month and contributed nearly half of the CPI's jump, with the gasoline index rising 11.2 percent. The energy index rose 41.6 percent over the last year, the largest 12-month increase since the period ending April 1980.
The food index rose 1.0 percent in June. The food index increased 10.4 percent for the 12 months ending June, the largest 12-month increase since the period ending February 1981.
On Tuesday, the International Monetary Fund IIMF) noted that the rapid rebound from the pandemic shock has been accompanied by a "broad-based surge in inflation," posing "systemic risks" to both the United States and the global economy.