Inflation Hit New Four-Decade High in June as Prices Climbed 9.1%

Prices in June climbed 9.1 percent from a year earlier, the fastest pace since 1981, as soaring gas prices, rising rents and swelling grocery bills made everyday life more expensive for American households. The pickup in prices was broad and faster than expected, spelling trouble for the Federal Reserve. From a report: The inflation index, including food and gas could slow down in July's data because prices at the pump have moderated in recent weeks. The national average cost of a gallon of unleaded gas peaked at about $5 last month. This week, it was around $4.65. But gas prices are volatile and could shoot up again. The report contained unwelcome news beyond the headline number. A core inflation index that strips out food and fuel prices -- giving a sense of underlying inflation trends -- remains high and came in faster than economists expected The core index climbed 5.9 percent the year through June, barely a slowdown from 6 percent in the previous report. The core measure actually climbed 0.7 percent from May to June, more than the previous monthly increase and bad news for central bankers. The question is whether that deceleration will last, and the answer is unclear. The global economy has been buffeted by a series of shocks that have not ceased since the coronavirus pandemic began. Factory shutdowns and shipping shortages have roiled supply chains, worker shortages are making it harder for airlines to fly at capacity and hotels to rent out rooms, and Russia's invasion of Ukraine has disrupted oil and gas supplies. Economists have spent more than a year struggling to predict how and when inflation will settle back down.

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