June’s bummer inflation report highlights the American pinch, but experts hope the worst is over
Price-a-Roni… the super-costly treat. June inflation numbers are turning heads. US consumer prices spiked 9.1% last month from June of last year — the fastest pace of inflation since 1981, and worse than economists expected. It's not just gas prices that have Americans couch-cushion-diving for spare change:
- Fettu-spendy: Staples like rice, pasta, and cornmeal were up 14% year over year.
- Flossy: Dental care shot up nearly 2% month over month, the largest monthly bump ever.
- Fleeced: Rent prices jumped 0.8% from May to June, the largest monthly spike since 1986.
- Air pain: Airfare dropped 1.8% for the month, but was up 34% year over year.
Tell me somethin’ I don’t know… Americans have been feeling the squeeze for a while, but June’s #s are a big blow to already fraying wallets. Wage hikes aren’t keeping up: inflation-adjusted incomes were down 1% over the month. For many, there's not much budget wiggle room: people are eating into their savings and racking up debt to keep up with bills.
Inflation has some stubborn spots… Americans are getting tired of hearing “inflation may have peaked,” especially after last month’s report. But this month, prices for inflation drivers like gas, corn, and metals have been falling. Still, stubborn staples like groceries aren’t showing many signs of easing. Now the Fed might raise interest rates by as much as 1 percentage point — up from previous expectations of a 0.75 hike.