WASHINGTON (NewsNation) — The costs of gas, food and other necessities jumped in June, surging the inflation rate to a four-decade peak and giving American households no break from rising costs.
Consumer prices soared 9.1% compared with a year earlier, the government said Wednesday, the biggest 12-month 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.
This jump in inflation in June “may cement the case” for the Federal Reserve to tighten policy, but traders might choose to “buy into the stance of peaking inflation” as oil prices fall, Yeap Jun Rong of IG said in a report.
Inflation has continued to climb as the economy recovers from the coronavirus pandemic, making consumers increasingly anxious about a potential recession. A measure of consumer confidence has reached its lowest point in 16 months, with Americans’ outlook darkened by inflation fears, especially gas and food prices.
Russia’s invasion of Ukraine pushed up prices of oil and other commodities. Global manufacturing supply chains were disrupted by Chinese efforts to contain virus outbreaks that temporarily shut down Shanghai and other industrial centers.
The U.S. bond market is flashing warning signals of a possible recession.
Some economists have held out hope that inflation might be reaching or nearing a short-term peak. Gas prices, for example, have fallen from the eye-watering $5 a gallon reached in mid-June to an average of $4.66 nationwide as of Tuesday — still far higher than a year ago but a drop that could help slow inflation for July and possibly August.
The White House stressed that the numbers from the report will be at least two weeks out of date.
“Gas and food prices continue to be heavily impacted by the war in Ukraine. And there are a few important points to keep in mind when we get this backward-looking data,” White House press secretary Karine Jean-Pierre said this week. “First, June CPI data is already out of date, because energy prices have come down substantially this month, and are expected to fall further.”
This story is developing. Refresh for updates.
The Associated Press contributed to this report.