Surging prices for gas, food and rent catapulted U.S. inflation to a new four-decade peak in June, further pressuring households and likely sealing the case for another large interest rate hike by the Federal Reserve, with higher borrowing costs to follow.
WASHINGTON — U.S. inflation surged to a new four-decade high in June because of rising prices for gas, food and rent, squeezing household budgets and pressuring the Federal Reserve to raise interest rates aggressively — trends that raise the risk of a recession.
“Everything goes up, including cheaper items like store brands,” said Freeman, who visited a food bank near Atlanta this week to try and gain control of her grocery costs. The year-over-year leap in consumer prices last month followed an 8.6% annual jump in May. From May to June, prices rose 1.3% — the largest monthly increase since 2005 —after prices had surged 1% from April to May.
The latest disappointing data on inflation came out at the outset of Biden’s trip to the Middle East, where he will meet with officials from Saudi Arabian to discuss oil prices, among other subjects. For now, the relentless pace of price increases has frustrated many Americans, some of whom are placing blame on companies for using inflation as a cover to raise prices beyond the amount they need to cover their own higher costs.
The biggest shock has been energy prices, which soared 7.5% just from May to June. Gas prices have skyrocketed nearly 60% compared with a year ago.
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