According to the most recent data, prices in the US are growing at their quickest rate in more than 40 years as a result of the continued high cost of food and gasoline.
The rate of price growth, or inflation, reached 9.1 percent in the year ending in June, up 1.3 percent from May alone, according to the Labor Department.
Last month, the cost of gasoline in the US averaged above $5 per gallon, setting new records.
Predictions have been made that the US central bank will raise interest rates again this month.
The numbers show that the US inflation rate has increased from 8.6 percent in May to its current level, which is the highest since November 1981.
A move in consumer spending from commodities to services was expected to help reduce inflation, but the fierce competition for labor has resulted in higher wages, which have fueled further price increases.
Since late last year, prices in the US have increased as a result of Covid’s disruption of the supply chain and higher food prices brought on by extreme weather. The conflict in Ukraine has also increased commodities costs across the board.
Some analysts have also attributed the acceleration of price hikes to President Biden’s Covid expenditure plans. It used $5 trillion (£4.1 trillion) in stimulus measures to protect people’s homes and workplaces from the pandemic’s economic blow.
The Biden administration, whose support has decreased as inflation surges, attempted to downplay June’s price increases earlier this week by pointing out that the costs of petroleum and other commodities had since dramatically decreased.
Quincy Krosby, chief equities strategist at LPL Financial, disagreed, stating that the remarks showed that the administration’s supporters’ worries had grown.
Nobody anticipated a print higher than 9 percent, he continued.
The US central bank is anticipated by the financial markets to increase interest rates once again to control rising prices at its meeting in a fortnight.
It increased its benchmark interest rate by three quarters of a percentage point to a range of 1.5 percent to 1.75 percent last month, marking the largest rate increase in over 30 years. It is expected to increase rates in July by a similar amount.
Despite the worries, Mr. Krosby claimed there were indications that inflation in the US was “near to peaking or plateauing.”
The global supply chain problems “appears to be improving at the margin, which should lead to costs going down,” he added. “We’re starting to see prices come down in commodities, freight and shipping.”