WASHINGTON, DC —
US inflation surged to a
fresh peak of 9.1 percent in June, further squeezing American families and
heaping pressure on President Joe Biden, whose approval ratings have taken a
battering from the relentless rise in prices.
اضافة اعلان
Government data released Wednesday showed a sharp,
faster-than-expected increase in the consumer price index compared to May
driven by significant increases in gasoline prices.
The 9.1 percent
consumer price index (CPI) spike
over the past 12 months to June was the fastest increase since November 1981,
the Labor Department reported.
Energy contributed half of the monthly increase, as
gasoline jumped 11.2 percent last month and a staggering 59.9 percent over the
past year. Overall energy prices posted their biggest annual increase since
April 1980.
While acknowledging the inflation rate was
“unacceptably high”, Biden argued that it was “out of date” as it did not
reflect a clear drop in energy prices since mid-June.
The recent price drop had provided “important
breathing room for American families. And, other commodities like wheat have
fallen sharply since this report,” the president said in a statement.
Insisting that
tackling inflation was the top priority, Biden admitted his administration
needed “to make more progress, more quickly, in getting price increases under
control.”
The war in Ukraine has pushed global energy and food
prices higher, and US gas prices at the pump last month hit a record of more
than $5 a gallon.
However, energy prices have eased in recent weeks,
with oil prices falling below $100 a barrel for the first time since April,
which could start to relieve some of the pressure on consumers.
But the
US Federal Reserve (Fed) is likely to
continue its aggressive interest rate increases as it tries to tamp down the
price surge by cooling demand before inflation becomes entrenched.
The US central bank last month implemented the
biggest rate hike in nearly 30 years, and economists say another
three-quarter-point increase is likely later this month.
Ian Shepherdson of Pantheon Macroeconomics summed up
the data in one word: “Ouch.”
“This report will make for very uncomfortable
reading at the Fed,” he said. “It rules out the chance of the Fed hiking by
only 50bp this month.”
Signs of cooling?
Driven by record-high
gasoline prices, the consumer price index jumped 1.3 percent in June compared
to May.
But Shepherdson noted some signs of cooling prices
in the data and predicted “this will be the last big increase.”
When volatile food and energy prices are stripped
out of the calculation, “core” CPI increased 5.9 percent over the past year —
still a rapid pace but slowing from the pace in May, according to the data.
Food and housing prices also rose in June, as did
car prices, though the rate has stabilized or slowed from the past month, the
report said.
The
White House came out ahead of the report to
predict it would show “highly elevated” inflation due to rising gasoline prices
that have since retreated.
According to AAA, the national average price at the
pump was down to $4.63 a gallon, from $5.01 a month ago.
Mickey Levy of Berenberg Capital Markets said the
“broadening” of price increases to more categories is a “cause for concern” for
the Fed’s efforts, but “there is reason to believe price increases may moderate
in the near term.”
Even so, the big jump left Biden open to intense
criticism from opposition Republicans, who blamed Democrats’ spending.
Even Democratic Senator Joe Manchin of West Virginia
accused leaders in Washington of ignoring the inflation risk.
“No matter what spending aspirations some in Congress may
have, it is clear to anyone who visits a grocery store or a gas station that we
cannot add any more fuel to this inflation fire,” Manchin said in a statement.
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