Posted on 14 Jul 2022
Adds President Joe Biden comment starting in third paragraph.
US consumer prices in June accelerated at a 9.1pc annual rate, a four-decade high that surpassed most analysts' forecasts and bolsters the US Federal Reserve's current course of steep interest rate hikes.
The consumer price index (CPI) in June rose by the most since November 1981, surpassing an 8.6pc annual pace in May, the US Bureau of Labor Statistics {BLS) said. Excluding energy and food, the so-called core inflation index rose by 5.9pc in June, slowing from 6pc in the 12 months through May.
President Joe Biden said that headline inflation rates were "unacceptably high" but also out-of-date because they do not fully reflect a roughly 40¢/USG drop in retail gasoline prices since mid-June. Energy purchases accounted for nearly half of last month's inflation increase.
Biden said tackling inflation was his "top priority" and he would keep working to bring down fuel prices. He said he would seek to put a price cap on Russian oil and work with domestic oil and gas producers to "responsibly" increase output, but said he wanted the recent drop in oil prices to be reflected in gasoline.
"Oil and gas companies must not use this moment as an excuse for profiting by not passing along savings at the pump," Biden said.
The larger-than-expected gain in headline inflation means the Fed is more likely to match last month's 0.75 percentage point rate hike at its meeting later this month in a bid to curtail borrowing and dampen inflation. Rate hikes "should continue to temper growth and help bring demand into better balance with supply," the Fed said last month.
Month over month, the headline CPI in June gained 1.3pc, accelerating from 1pc in May, the BLS said. Core inflation rose on the month by 0.7pc in June, compared with 0.6pc in May.
The CPI increase was broad-based, with shelter, gasoline and food leading price gains.
The energy index rose by 41.6pc over the last year, the largest annual gain since the period ended April 1980. The food index rose at a 10.4pc annual rate, the largest gain since February 1981.
Energy commodities rose by 60.6pc over the 12 months, while gasoline rose by 59.9pc and fuel oil rose by 98.5pc. Utility natural gas rose by 38.4pc and electricity rose at a 13.7pc annual pace.
Compared with the prior month, energy commodities rose by 10.4pc in June after rising by 4.5pc in May. Gasoline rose by 11.2pc after rising by 4.1pc in the prior month. Food rose by 1pc after rising by 1.2pc in the prior month.
Source:Argus Media
