United States consumer prices increased last month at the fastest race since Aug. 2008.
The Labor Dept. revealed on Tuesday that the consumer price index went up y 0.9% in June, more than the 0.6% uptick in May. Analysts polled by Refinitiv were anticipating a 0.5% boost.
Used car prices also went up 10.5% last month, making up more than one-third of the boost. Also, energy prices went up 1.5% month over month and the price food also rose by 0.8%.
Prices increased 5.4% year over year, and have been going higher every month of 2021. Analysts polled by Refinitiv were anticipating prices to only increase by 4.9% annually.
The yearly data has a “base effects” tilt because of the lowering in prices that happened at the beginning of the covid-19 pandemic.
Core prices, which exclude energy and foods, increased 0.9% in June, more than the 0.7% boost recorded in May. The 4.5% yearly increase was the highest since Nov. 1991.
Higher prices went through large swaths of America’s economy as businesses have had trouble solving supply-chain bottlenecks that happened as a result of the covid pandemic. Some businesses are also having a hard time finding workers as easy unemployment benefits have led to workers staying home.
The Fed has said that these price gains are only “transitory” and that they will soon return to pre-covid levels as the dislocations from the pandemic are dealt with.
However, Jerome Powell, the Fed Chairman, has admitted the timing of this is “uncertain.”
This comes at a time when President Biden is preoccupied with election security changes among other partisan issues.
Meanwhile, Republicans say Biden’s out of control spending has caused the current inflation problems. And Democrats are maneuvering away from their previous “defund the police” stance, and instead linking police funding with the agenda-filled relief programs of the past six months.
By doing this, they hope to pin the blame of “defunding” the police on Republicans. This attempt seems to have failed as far too many Americans heard their calls to “defund the police” in 2020 and before.
Author: Steven Sinclaire