The US Consumer Price Index, a measure of inflation, grew by 5.4 percent over a one-year period in June for its largest increase in 13 years, the Labor Department announced on Tuesday
WASHINGTON (Pakistan Point News / Sputnik - 13th July, 2021) The US Consumer Price Index, a measure of inflation, grew by 5.4 percent over a one-year period in June for its largest increase in 13 years, the Labor Department announced on Tuesday.
"Over the last 12 months, the all items index increased 5.4 percent before seasonal adjustment," the department said, breaking down the data, popularly known by its acronym CPI. "This was the largest 12-month increase since a 5.4-percent increase for the period ending August 2008."
The CPI typically measures what consumers pay for goods and services, including clothes, groceries, restaurant meals, recreational activities and vehicles.
The so-called core reading of the CPI, that is stripped of often-volatile food and energy prices, grew 4.5 percent in the year to June.
The Federal Reserve's preferred inflation gauge the core PCE, or Personal Consumption Expenditures Index, which also leaves out food and energy prices, rose by a multiyear high of 3.4 percent in the 12 months to May.
Economists polled by US media forecast a 4.9 percent year-on-year growth in gross CPI for June, putting the 5.4 percent reported by the Labor Department well above their target.
Some questioned the logic of certain components of the CPI, such as used cars prices, which supposedly rose 45.2 percent year-on-year.
"You're telling me a used car from last June that was selling for $20,000 is now getting nearly $30,000!?" economist Adam Button wrote in apparent disbelief on the FX Live forum.
The US economy shrank by 3.5 percent in 2020 due to lockdowns imposed by the COVID-19. Since the start of this year, growth has exceeded expectations, with a first quarter expansion of 6.4 percent.
The Fed, however, has been grappling with soaring inflation as prices have ballooned across the board from the lows of the pandemic.
Commodity-fueled inflation has become a hot-button issue in the United States since vaccine breakthroughs for the COVID-19 in November unleashed price rallies in most raw materials amid forecasts for rapid economic recovery from the pandemic. Constraints in supply chains seeing explosive demand after months of lax activity have added to the upward price pressure in most commodities.
The White House said last week that monopoly by players in key US industries has also led to tripling mark-ups in prices of necessities such as prescription drugs, hearing aids and internet service.
