Consumer prices in the U.S. saw the biggest monthly increase in thirteen years in the month of June, according to a report released by the Labor Department on Tuesday.
The Labor Department said its consumer price index jumped by 0.9 percent in June after climbing by 0.6 percent in May. Economists had expected consumer prices to rise by 0.5 percent.
The bigger than expected increase in consumer prices reflected the biggest advance since prices surged up by 1.0 percent in June of 2008.
A spike in prices for used cars and trucks accounted for more than one-third of the increase in consumer prices, with prices for used cars and trucks soaring by 10.5 percent.
Food prices also increased by 0.8 percent in June after rising by 0.4 percent in May, while energy prices jumped by 1.5 percent after coming in unchanged in the previous month.
Excluding food and energy prices, core consumer prices still jumped by 0.9 percent in June following a 0.7 percent increase in May. Core prices were expected to rise by 0.4 percent.
The increase in core prices reflected the spike in prices for used cars and trucks as well as higher prices for new vehicles, airline fares, and apparel.
The Labor Department said the index for medical care and the index for household furnishings and operations were among the few major component indexes that decreased in June.
The annual rate of consumer price growth accelerated to 5.4 percent in June from 5 percent in May, reaching the highest level since a matching spike in August of 2008.
Core consumer prices were up by 4.5 percent year-over-year in June, reflecting an acceleration from the 3.8 percent jump in May. Core prices saw the biggest annual increase since November of 1991.
“The surge in demand triggered by the easing of Corona-related restrictions is causing significant bottlenecks and price increases in parts of the economy,” said Dr. Christoph Balz, Senior Economist at Commerzbank. “Under these circumstances, the Fed’s tapering of its bond purchases is drawing closer.”
On Wednesday, the Labor Department is scheduled to release a separate report on producer price inflation in the month of June.
Economists currently expect producer prices to climb by 0.6 percent in June, while core prices are expected to rise by 0.5 percent.
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