As gasoline and food prices continued to rise, U.S. consumer prices increased in June. This led to the largest annual increase in inflation in 40-1/2 years and strengthened the case for the Federal Reserve’s decision to raise interest rates by 75 basis points later this month.
According to data released by the Labor Department on Wednesday, the consumer price index grew by 1.3 percent in June after rising by 1.0 percent in May.
Reuters polled economists, who predicted that the CPI would increase by 1.1%. As the COVID-19 pandemic spreads, clogged global supply chains and significant fiscal support from governments are driving up consumer costs.
The situation has gotten worse as a result of the ongoing crisis in Ukraine, which has increased the price of food and fuel globally.
According to figures from the motorist advocacy group AAA, petrol prices in the United States reached all-time highs in June, averaging over $5 per gallon. Since their peak last month, they have dropped, and on Wednesday, they were averaging $4.631 per gallon, which might relieve some of the pressure on customers.
The inflation figures came after June’s better-than-anticipated job growth. The government announced on Friday that the economy added 372,000 jobs in the past month, and that a more comprehensive gauge of unemployment reached a record-low level.
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