Washington: US consumer price inflation surged 9.1 per cent over the past 12 months to June, the fastest increase since November 1981, according to government data released Wednesday.

Driven by record-high gasoline prices, the consumer price index jumped 1.3 per cent in June, the Labor Department reported.

However, excluding volatile food and energy prices, “core” CPI increased 5.9 per cent over the past year, slowing from the pace in May, according to the data. But the rate rose 0.7 per cent compared to May, up slightly from the prior two months.

Economists projected a 1.1% rise from May and an 8.8% year-over-year increase, based on the Bloomberg survey medians.

The so-called core CPI, which strips out the more volatile food and energy components, advanced 0.7% from the prior month and 5.9% from a year ago, above forecasts.

The red-hot inflation figures reaffirm that price pressures are rampant and widespread throughout the economy and continue to sap purchasing power and confidence.

That will keep Fed officials on an aggressive policy course to rein in demand, and adds pressure to President Joe Biden and congressional Democrats whose support has slumped ahead of midterm elections.

While many economists have suggested this data will be the peak in the current inflationary cycle, several factors such as housing stand to keep price pressures elevated for longer.

Geopolitical risks including Covid lockdowns in China and Russia’s war in Ukraine also pose risks to supply chains and the inflation outlook.

The ongoing price increases underscore the brutal impact that inflation has inflicted on many families, with the costs of necessities, in particular, rising much faster than average incomes.

Lower-income and Black and Hispanic Americans have been hit especially hard, because a disproportionate share of their income goes toward such essentials as housing, transportation and food.

Some economists have held out hope that inflation might be reaching or nearing a short-term peak. Gas prices, for example, have fallen from the eye-watering $5 a gallon reached in mid-June to an average of $4.66 nationwide as of Tuesday — still far higher than a year ago but a drop that could help slow inflation for July and possibly August. 

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