Consumer prices in the United States increased by 5.4% between June 2020 and last month, the Labor Department said on Tuesday — the steepest 12-month increase in more than a decade.
The department detailed the increase in its Consumer Price Index, which also showed an 0.9% increase over May. Both figures are the largest increases since 2008, the department said.
When food and energy prices are removed from the all items index, the 12-month increase was 4.5%, which is the greatest hike in nearly 30 years.
The index measures price increases in all core items for urban consumers.
The department said used cars and trucks led the increase, rising 10.5% and accounting for more than a third of all items.
Experts said the global shortage of semiconductors that slowed the production of new vehicles, matched with a spike in demand, drove the used vehicle surge.
“It’s just been a series of perfect storm events that have prevented the new vehicle production from getting back to normal,” Jonathan Smoke, chief economist for Cox Automotive, told NPR. “And while that supply has been challenged, we’ve had surging demand.”
The food index increased 0.8% and energy 1.5% for June. Over the past 12 months, the energy index has risen 24.5% and the food index 2.4%.
The White House and analysts at Federal Reserve expect the inflation to start slowing, but central bank officials agree that inflation has had more staying power than expected.
“This does increase some of the jitters among some [Fed] members,” Sarah House, senior economist for Wells Fargo’s investment bank, according to CNBC.
“There are a number of areas where inflation is picking up and likely has staying power. That’s going to make some folks nervous.”
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