The rise in consumer prices, i.e. inflation, was stronger than economists expected.
Consumer prices price increase, i.e. inflation, clearly accelerated more than expected in June in the United States.
The inflation rate was 9.1 percent, while economists estimated it to have been 8.8 percent, according to the news agency Reuters. In May, the inflation rate was 8.6 percent.
Energy became more expensive in June by 42 percent compared to the same time last year, food by ten percent, new car prices by 11 percent and housing by six percent.
The exceptionally strong inflation is due to disruptions in supply and a noticeable increase in demand, which has been increased by a strong fiscal stimulus. The last time the inflation rate was over nine percent was in November 1981, when it was 9.6 percent.
The strengthening of inflation is probably one of the reasons that the president Joe Biden according to opinion polls, support has decreased significantly.
Core inflation, closely monitored by central banks, was 6.0 percent in June, which is 0.1 percentage point less than in May. The effect of energy and food, which are subject to sensitive changes, has been removed from core inflation.
To slow down inflation, the central bank plans to tighten monetary policy several times this year. According to the central bank’s price stability objective, inflation should be two percent on average over a long period of time.
Director general Jerome Powell announced in June, that an exceptionally large interest rate increase of 0.75 percentage points is also possible in July. For the first time since 1994, the central bank last resorted to an equally large interest rate hike in June.
Read more: The United States central bank decided to raise the interest rate by an extraordinary amount – stocks rose significantly
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