- Dockers end three-day strike at Montreal port
- What next for OpenAI after $157 billion bonanza?
- Israel-Hamas war causes 86-percent dive in Gaza GDP: IMF
- Milan's Morata moves house after Inter-fan town mayor 'violates' privacy
- 'Devastating' storm hits Augusta National but Masters will go on
- Relief in Brazil, Asia over delay to EU deforestation rules
- Oil prices jump, stocks fall on Middle East tensions
- Biden says 'discussing' possible Israeli strikes on Iran oil facilities
- Oil prices rise, stocks fall on Middle East tensions
- Oil rallies, stocks mostly retreat on Middle East tensions
- Phasing out teen smoking could save 1.2 mn lives: study
- 'Welcome relief': Asia producers hail EU deforestation law delay
- Japan PM slated to announce plans for 'happiness index'
- Turkish inflation falls less than expected in September at 49.4%
- Easing inflation lifts profit at UK supermarket Tesco
- Skiing calls on UN climate science to combat melting future
- China wine industry looks to breed climate resilience
- Tokyo rallies on weak yen, Hong Kong drops after surge
- Dutch airline KLM unveils 'firm' cost-cutting measures
- Carpe diem: the Costa Rican women turning fish into fashion
- Senegal looks to aquaculture as fish stocks dwindle
- Will AI one day win a Nobel Prize?
- Climate change, economics muddy West's drive to curb Chinese EVs
- Argentina's Milei vetoes university budget after huge protests
- TotalEnergies plans to grow oil and gas production until 2030
- 2024 Nobels offer glimmer of hope as global crises mount
- Tokyo rallies on weak yen, Hong Kong reverses after surge
- Tunisia readies for vote as incumbent Saied eyes victory
- High childcare costs in US weigh on women's employment
- US voters seek help with crushing childcare costs
- Taiwan shuts down for second day as Typhoon Krathon to land
- Supercharged storms: how climate change amplifies cyclones
- Biden official urges talks as US port strike enters second day
- Huge protests in Argentina over public university cuts
- Rally in oil prices loses steam on mixed day for global stocks
- South America treated to rare 'ring of fire' eclipse
- Biden official says port strike deal not as far as parties think
- Mexico's new president offers apology for 1968 student massacre
- Historic funding round values OpenAI at $157 billion
- Mixed US car sales in Q3 as industry hopes for post-election bounce
- Thunderstorms are a 'boiling pot' of gamma rays, scientists find
- Scientists unlock secret of 'Girl With Pearl Earring'
- Dolphins flash friendly grins when they're ready to play
- Facing backlash, EU moves to delay deforestation rules
- US private sector adds more jobs than expected in September: ADP
- Boys out of critical condition after Zurich stabbings
- Spain logs record summer tourism as inflow draws protests
- Hedi Slimane quits as Celine's artistic director
- Oil prices extend rally on Iran attack
- Spain welcomed record number of tourists this summer
RBGPF | -1.35% | 59.99 | $ | |
CMSC | -0.16% | 24.74 | $ | |
RYCEF | 1.15% | 6.98 | $ | |
VOD | -0.52% | 9.69 | $ | |
NGG | -2.7% | 66.97 | $ | |
RIO | -1.42% | 69.83 | $ | |
GSK | -2.81% | 38.37 | $ | |
RELX | -1.46% | 46.61 | $ | |
SCS | -1.98% | 12.62 | $ | |
BTI | -2.45% | 35.11 | $ | |
CMSD | -0.16% | 24.89 | $ | |
BP | 0.28% | 32.46 | $ | |
AZN | -2.12% | 77.93 | $ | |
BCC | -0.9% | 138.29 | $ | |
JRI | -0.6% | 13.3 | $ | |
BCE | -1.77% | 33.84 | $ |
US consumer prices surge 9.1%, a new 40-year high
US inflation surged to a fresh peak of 9.1 percent in June, further squeezing American families and heaping pressure on President Joe Biden, whose approval ratings have taken a battering from the relentless rise in prices.
Government data released Wednesday showed a sharp, faster-than-expected increase in the consumer price index compared to May driven by significant increases in gasoline prices.
The 9.1 percent CPI spike over the past 12 months to June was the fastest increase since November 1981, the Labor Department reported.
Energy contributed half of the monthly increase, as gasoline jumped 11.2 percent last month and a staggering 59.9 percent over the past year. Overall energy prices posted their biggest annual increase since April 1980.
While acknowledging the inflation rate was "unacceptably high," Biden argued that it was "out of date" as it did not reflect a clear drop in energy prices since mid-June.
The recent price drop had provided "important breathing room for American families. And, other commodities like wheat have fallen sharply since this report," the president said in a statement.
Insisting that tackling inflation was the top priority, Biden admitted his administration needed "to make more progress, more quickly, in getting price increases under control."
The war in Ukraine has pushed global energy and food prices higher, and US gas prices at the pump last month hit a record of more than $5 a gallon.
However, energy prices have eased in recent weeks, with oil prices falling below $100 a barrel for the first time since April, which could start to relieve some of the pressure on consumers.
But the Federal Reserve is likely to continue its aggressive interest rate increases as it tries to tamp down the price surge by cooling demand before inflation becomes entrenched.
The US central bank last month implemented the biggest rate hike in nearly 30 years, and economists say another three-quarter-point increase is likely later this month.
Ian Shepherdson of Pantheon Macroeconomics summed up the data in one word: "Ouch."
"This report will make for very uncomfortable reading at the Fed," he said. "It rules out the chance of the Fed hiking by only 50bp this month."
- Signs of cooling? -
Driven by record-high gasoline prices, the consumer price index jumped 1.3 percent in June compared to May.
But Shepherdson noted some signs of cooling prices in the data and predicted "this will be the last big increase."
When volatile food and energy prices are stripped out of the calculation, "core" CPI increased 5.9 percent over the past year -- still a rapid pace but slowing from the pace in May, according to the data.
Food and housing prices also rose in June, as did car prices, though the rate has stabilized or slowed from the past month, the report said.
The White House came out ahead of the report to predict it would show "highly elevated" inflation due to rising gasoline prices that have since retreated.
According to AAA, the national average price at the pump was down to $4.63 a gallon, from $5.01 a month ago.
Mickey Levy of Berenberg Capital Markets said the "broadening" of price increases to more categories is a "cause for concern" for the Fed's efforts, but "there is reason to believe price increases may moderate in the near term."
Even so, the big jump left Biden open to intense criticism from opposition Republicans, who blamed Democrats' spending.
Even Democratic Senator Joe Manchin of West Virginia accused leaders in Washington of ignoring the inflation risk.
"No matter what spending aspirations some in Congress may have, it is clear to anyone who visits a grocery store or a gas station that we cannot add any more fuel to this inflation fire," Manchin said in a statement.
M.Anderson--CPN