The inflation news just keeps getting worse.
The Labor Department reported Thursday that consumer prices soared 9.1% in June, compared with a year earlier. That’s the biggest yearly increase since 1981.
Wholesale prices jumped 11.3% in June compared to a year earlier, and the Labor Department said Thursday the U.S. producer prices index rose at the fastest rate since March, when it hit a record 11.6%.
The biggest mover? Energy prices, which the Associated Press reported climbed 54% from a year ago. On a month-to-month basis, wholesale inflation rose 1.1% from May to June, also the biggest jump since March.
In an effort to combat the record inflation, The Fed has raised interest rates twice – a quarter-point earlier this year and a three-quarter point hike last month – and is expected to add another three-quarter point later in July.
“Despite a modest improvement in supply conditions, price pressures will remain uncomfortable in the near term and bolster the Fed’s resolve to prevent inflation from becoming entrenched in the economy,″ Mahir Rasheed, U.S. economist at Oxford Economics, said in a research note, according to the AP. “Higher production costs will sustain upside risks to consumer prices as businesses tease out how much additional pass-through consumers will tolerate.″