The Consumer Price Index (CPI) increased by 9.1 percent in June from one year earlier, the steepest increase recorded in nearly 41 years, the Bureau of Labor Statistics revealed on Wednesday.
The increase was higher than the 8.8 percent rise projected by economists.
Core CPI, excluding volatile energy and food prices, increased by 5.9 percent year-over-year, also higher than the 5.7 percent increase economists had predicted.
The CPI increased by 1.3 percent in June alone, while the core CPI increased 0.7 percent in the same period.
Food prices have been hard hit by inflation, rising 10.4 percent in the year leading up to June in the biggest annual increase since 1981. The cost of eating at home increased 12.2 percent, while the cost of eating meals outside the home went up 7.7 percent.
Meanwhile, energy prices jumped 7.5 percent on the month and were up a whopping 41.6 percent year-over-year.
President Biden on Wednesday called the new inflation figures “unacceptably high” but argued they are “out-of-date.”
“Energy alone comprised nearly half of the monthly increase in inflation,” he said. “Today’s data does not reflect the full impact of nearly 30 days of decreases in gas prices, that have reduced the price at the pump by about 40 cents since mid-June.”
“Those savings are providing important breathing room for American families. And, other commodities like wheat have fallen sharply since this report,” Biden added.
The national average gas price dropped to $4.631 a gallon on Wednesday after hitting a record-breaking $5 last month, according to AAA data.
A Congressional Budget Office report released in late May predicted that inflation will last into 2023, though at a decreasing rate over the course of this year.
“In CBO’s projections, elevated inflation persists in 2022 because of the combination of strong demand and restrained supply in the markets for goods, services, and labor,” CBO director Phillip L. Swagel said in a statement. “In response, the Federal Reserve tightens monetary policy, and interest rates rise rapidly.”
Commerce Secretary Gina Raimondo on Sunday said inflation is the administration’s “top priority.”
“The fundamentals of this economy are very strong,” Raimondo said. “Inflation is our problem, and it is our top priority. And so I think perhaps a transition to a more traditional growth level, but I don’t think we should be talking ourselves into a recession.”
She acknowledged that inflation has been “hard on folks” but noted that gas prices are starting to come down.
“But until we do get a handle on inflation, I think it’s natural for a family to be feeling that pinch,” she added.
Meanwhile, Biden has claimed that the idea that his $1.9 trillion American Rescue Plan has contributed to record-breaking inflation is “bizarre.”
“You could argue whether [the American Rescue Plan] had a marginal, minor impact on inflation,” Biden said last month. “I don’t think it did. And most economists do not think it did. But the idea that caused inflation is bizarre.”
Yet Biden himself acknowledged in November 2021 that several Covid relief provisions, including giving Americans $1,400 checks, could increase inflation. The pandemic also snarled supply chains, creating a situation of more money chasing fewer goods — the formula for inflation.