Rising gas, food and rent prices pushed US inflation to a new four-decade peak in June, putting further pressure on homes and sealing the case for another major interest rate hike by the Federal Reserve, including higher borrowings. The cost was to follow.
Consumer prices rose 9.1% from a year ago, the government said on Wednesday, the biggest 12-month increase since 1981, and up from an 8.6% jump in May. On a monthly basis, prices increased by 1.3% from May to June, followed by a 1% increase in prices from April to May, another substantial increase.
Ongoing price increases underscore the brutal impact of inflation on many households, especially with the cost of necessities, rising much faster than the average income. Low-income and black and Hispanic Americans have been hit particularly hard, as a disproportionate portion of their income goes toward essentials like housing, transportation, and food.
Some economists have expressed hope that inflation may reach or be close to a short-term peak. For example, gas prices fell from $5 per gallon in mid-June to an average of $4.66 nationwide on Tuesday, still far higher than a year ago, but a drop that could last until July and possibly even more. May help slow inflation for August. ,
In addition, shipping costs and commodity prices have started to decline. Wage growth has slowed. And polls show that over the long term, Americans’ expectations for inflation have bucked a trend that often points to more moderate price increases over time.
Yet for now, continued rise in inflation has caused a sharp drop in consumer confidence in the economy, slashed President Joe Bidens’ approval ratings and posed a major political threat to Democrats in November’s congressional election. . Forty percent of adults in an AP-NORC poll in June said they thought tackling inflation should be a top government priority this year, up from just 14% who said so in December.
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