Inflation continued to surge in June, with consumer prices accelerating at the fastest pace in almost 13 years as the economy emerges from the pandemic, the feds said Tuesday.
The Labor Department’s Consumer Price Index, which measures a basket of goods and services as well as energy and food costs, jumped 5.4 percent in June from a year earlier.
That’s higher than May’s 5 percent year-over-year rise in prices, and the biggest 12-month rise since August 2008, just before the financial crisis sent the US into the worst recession it had seen since the Great Depression.
Economists surveyed by Dow Jones expected a 5 percent spike in June.
Consumer prices rose 0.9 percent from the month prior on a seasonally adjusted basis, the Labor Department said.
The core consumer price index, which excludes volatile food and energy costs, rose 4.5 percent from a year ago, the fastest acceleration since 1991.
One driver of the massive annual gain is very low inflation this time last year, when the pandemic gutted the economy and consumers were staying indoors and spending less. That could distort year-over-year comparison as the economy reopens.
Those comparisons aside, prices are spiking throughout the economy for a variety of reasons, including supply-chain bottlenecks as the economy rapidly reopens from the pandemic.
Commodities from lumber to corn and other crops have also risen dramatically in price, though some of those costs have crested and begun to fall again in recent weeks.
A labor shortage that’s preventing many businesses from fully reopening as well as subsequent wage hikes to attract new workers is also driving up some costs.
Many companies are now passing those costs on to consumers, sending the price for new houses, food — and more — upward.