US inflation hits 40-year high in June

According to the Bureau of Labor Statistics data, US consumer inflation accelerated to 9.1% in June, the highest level in more than 40 years and higher than the previous reading, when prices rose by 8.6 percent for the year ended in May.

It is also much higher than the 8.8 percent that economists had predicted, according to the data. Prices jumped another 1.3 percent between May and June, following a one-percent rise in May.

The last time inflation reached over 9 percent was November 1981.

Much of the June increase was driven by a jump in gasoline prices, which were up nearly 60 percent over the year.

The US faced record-high gas prices last month, with the national average topping $5 a gallon across the country.

The increases, however, were felt across all categories.

Electricity and natural gas prices also rose by 13.7 percent and 38.4 percent, respectively, for the 12-month period ended in June. Overall, energy prices rose by 41.6 percent year-over-year.

Prices for food were up 12.2 percent over the year, with eggs up 33.1 percent, butter up 21.3 percent, milk up 16.4 percent, chicken up 18.6 percent, and coffee up 15.8 percent.

According to Mark Zandi, chief economist at Moody’s Analytics, the typical American household now needs to spend $493 more per month to buy the same goods and services they did at this time last year.

President Joe Biden admitted that the June CPI inflation reading was “unacceptably high,” saying that tackling inflation is his “top priority.”

“Inflation is our most pressing economic challenge. It is hitting almost every country in the world … Tackling inflation is my top priority — we need to make more progress, more quickly, in getting price increases under control,” Biden said on Wednesday.

The president, however, said that the figures are “also out of date,” since gas prices have lowered in the last 30 days.

Gasoline and crude oil prices are now below $100 per barrel, down from their highs in June.

“Energy alone comprised nearly half of the monthly increase in inflation,” Biden said.

Biden has taken a range of targeted actions to deal with the soaring gas prices, which has created serious headwinds for his Democratic party ahead of the midterms.

The Democratic president placed an embargo on Moscow oil earlier this year, shortly after Russian President Vladimir Putin declared a military campaign against Ukraine on February 24.

In addition to the oil embargo, Washington and its Western allies imposed unprecedented waves of sanctions on Moscow.

The move has so far sent the prices of grain, cooking oil, fertilizers and energy skyrocketing.