WASHINGTON (AP) — Surging prices for gas, food and rent catapulted U.S. inflation to a new four-decade peak in June, further pressuring households and likely sealing the case for another large interest rate hike by the Federal Reserve, with higher borrowing costs to follow.
Consumer prices soared 9.1% compared with a year earlier, the government said Wednesday, the biggest yearly increase since 1981, and up from an 8.6% jump in May. On a monthly basis, prices rose 1.3% from May to June, another substantial increase, after prices had jumped 1% from April to May.
The ongoing price increases underscore the brutal impact that inflation has inflicted on many families, with the costs of necessities, in particular, rising much faster than average incomes. Lower-income and Black and Hispanic Americans have been hit especially hard, because a disproportionate share of their income goes toward such essentials as housing, transportation and food.
Excluding the volatile food and energy categories, so-called core prices rose 0.7% from May to June, the biggest such increase in a year. And compared with 12 months earlier, core prices jumped 5.9% in June, down from a recent year-over-year high of 6.4% in March but still exceedingly high.
If you feel like you’ve heard the terms “inflation” and “40-year high” before, you’re not wrong. It’s been part of a monthslong trend. Here are some previous headlines:
Inflation hit a new 40-year high in May, driven by gas prices
US inflation highest in 40 years, with no letup in sight
Travis Pittman contributed to this report.