According to new data released by the Bureau of Labor Statistics (BLS) on Wednesday, July 13, inflation surged to a new pandemic-era peak in June, with consumer prices in the United States jumping by 9.1 percent year-over-year.
That is the highest level in more than 40 years and higher than the previous reading when prices increased by 8.6 percent for the year ended in May. According to Refinitiv, it is also much higher than the 8.8 percent predicted by economists.
The Consumer Price Index (CPI) for June also showed that overall prices consumers pay for various services and goods rose by 1.3 percent from May to June. Much of the June increase was driven by soaring gasoline prices, which were up nearly 60 percent over the year, according to CNBC.
Americans struggled with record-high gas prices in June
Americans endured record-high gas prices last month, with the national average topping $5 a gallon across the United States. Natural gas and electricity prices rose by 38.4 percent and 13.7 percent, respectively, for the 12-month period ending in June. Overall, energy prices increased by 41.6 percent year-over-year.
The increases were felt by American consumers across all categories. Prices for food at home were up 12.2 percent over the year, with eggs up 33.1 percent, butter up 21.3 percent, chicken up 18.6 percent, milk up 16.4 percent, and coffee up 15.8 percent. Shelter costs were also up by 5.6 percent.
President Joe Biden acknowledged that the June CPI inflation reading was unacceptably high but argued that the numbers are also outdated since gas prices in the country have lowered in the last 30 days. Crude oil and gasoline prices are now below $100 per barrel, down from their highs in June.
Biden said that energy alone comprised nearly half of the monthly increase in inflation. He added that the data does not reflect the full impact of nearly 30 days of gas price decreases, which have reduced the pump price by about 40 cents since the middle of June. Biden noted that those savings provide important breathing room for American families, and other commodities such as wheat have also fallen sharply since this report.
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Tackling inflation is a top priority for the Biden administration
The commander-in-chief also reiterated that tackling inflation is his top priority. 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 services and goods they did at this time last year.
As prices continue to rise in the U.S., they are also outstripping wage gains in the country. According to separate BLS data, actual average hourly earnings, representing wage growth adjusted for inflation, dropped 1 percent from May to June and are down 3.6 percent from June 2021.
Kathy Jones, the managing director and chief fixed income strategist at Charles Schwab, told CNN that inflation had eroded most of the gains, and people's purchasing power is decreasing.
