Inflation continued its rapid surge in June, rising its fastest pace in nearly 13 years, the Labor Department reported Tuesday.
The consumer price index increased 5.4% from a year ago, the largest jump since just before the financial crisis. Economists surveyed by Dow Jones had been expecting a 5% gain.
Stripping out volatile food and energy prices, the core CPI rose 4.5%, the sharpest move for that measure since September 1991 and well above the estimate of 3.8%.
On a monthly basis, headline and core prices both rose 0.9% against 0.5% estimates.
Inflation has been escalating due to a number of factors, including supply chain bottlenecks, extraordinarily high demand as the Covid-19 pandemic eases, and year-over-year comparisons to a time when the economy was struggling to reopen in the early months of the crisis.
Policymakers at the Federal Reserve and the White House expect the current pressures to begin to ease, though central bank officials have acknowledged that inflation is stronger and perhaps more durable than they had anticipated.
Much of the price pressures have come from sectors particularly influenced by the shutdown – used car prices, air fares and transportation costs, to name three.
That was the case again last month, as used car and truck prices leaped 10.5%, accounting for more than one-third of all the price index’s gains.
Food and energy prices also were up substantially, increasing 0.8% and 1.5% respectively.
However, housing and shelter prices continue to climb, adding fuel to the belief that inflation could stick around for a while.
Consumers see prices overall up 4.8% in the next 12 months, according to a New York Fed survey released Monday, though a separate survey from Bank of America out Tuesday indicated that professional investors are more inclined to believe that inflation will be temporary.
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