U.S. Inflation Hit 40-Year High In June As Gas Prices Soared

In June, inflation reached a new pandemic-era high, with United States consumer prices rising 9.1 percent year-on-year, according to new statistics released Wednesday (Thursday, July 14, 2022, in Manila) by the Bureau of Labor Statistics (BLS), Lucy Bayly and Alicia Wallace reported for CNN Business.

Photo Insert: Prices are outpacing salary growth as they continue to climb.

This is the highest level in more than 40 years, and it is greater than the previous report, which showed that prices grew by 8.6 percent for the year ended in May. It is also significantly more than the 8.8 percent projected by economists, according to Refinitiv.

The Consumer Price Index (CPI) for June also revealed that overall prices paid by customers for a variety of products and services increased by 1.3 percent from May to June, according to Alice Malloy for CNN Business.

A large portion of the June increase was driven by an increase in gasoline prices, which were up nearly 60% year on year. Last month, Americans faced record-high gas prices, with the national average exceeding $5 per gallon across the country. For the 12-month period ending in June, electricity and natural gas prices jumped by 13.7 percent and 38.4 percent, respectively.

Overall, energy prices increased 41.6 percent year over year. However, the gains were felt across all categories. Prices for food at home rose 12.2 percent year on year, with eggs rising 33.1 percent, butter rising 21.3 percent, milk rising 16.4 percent, chicken rising 18.6 percent, and coffee rising 15.8 percent. Shelter expenses increased by 5.6 percent.

President Joe Biden stated Wednesday that the June CPI inflation reading was "unacceptably high," but that it was also "out of date" because gas costs had dropped in the previous 30 days.

Gasoline and crude oil prices have fallen below $100 per barrel since their peak in June. "Energy alone comprised nearly half of the monthly increase in inflation," added Biden.

The U.S. President further emphasized that "Today's data do not reflect the full impact of nearly 30 days of decreases in gas prices that have reduced the price at the pump by about 40 cents since mid-June. Those savings are providing important breathing room for American families. And, other commodities like wheat have fallen sharply since this report."

According to Mark Zandi, chief economist of Moody's Analytics, a typical US household now has to spend $493 more each month to buy the same goods and services they bought this time last year.

Prices are outpacing salary growth as they continue to climb. According to BLS data, real average hourly earnings, which represent pay growth adjusted for inflation, fell 1% from May to June and are down 3.6 percent from June 2021.

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