US Inflation Hits 40-Year High

US Inflation powered to a new peak in June, with American consumer prices leaping by 9.1% year-over-year, according to new data.

Inflation is at its highest level in four decades, and higher than the previous month’s reading in May, when prices rose by 8.6%. June’s reading also overshot the 8.8% that most economists had predicted.

The Consumer Price Index for June also revealed that overall prices that consumers pay for a basket of goods and services climbed by 1.3% from May to June. Most of the latest increase can be attributed to a sharp rise in gasoline prices, which were up nearly 60% over the year. The national average for a gallon of gas topped $5. Electricity and natural gas prices also spiked by 13.7% and 38.4%, respectively. The increases could be felt across many goods and services. Food prices rose 12.2% over the year, with staples like eggs climbing a staggering 33.1%, butter up 21.3%, and milk up by 16.4%.

What does this mean for me? 

Inflation has severely eroded the purchasing power of the typical American. The average US household now requires almost $500 more per month to buy the same goods and services it did this time last year.

As prices continue to climb, they are also outpacing wage gains. Real average hourly earnings slumped 1% from May to June and are down 3.6% from June 2021. It all points to tough economic times ahead, especially as the Federal Reserve continues to struggle to tame inflation through tight monetary policy.