No slowdown yet in U.S. inflation, as rate rises to 9.1% in June
Cost of living went up by 1.3% in the month of June alone
The U.S. annual inflation rate defied expectations and rose to a new multi-decade high of 9.1 per cent in the year up to June.
The U.S. Bureau of Labour Statistics said Wednesday that the cost of living rose by 1.3 per cent in the month of June alone, and in three of the past four months.
Rising costs for gasoline, shelter and food were the main drivers of the annual uptick. Energy prices have increased by 41.6 per cent in the past year. Food costs are up by 10.4 per cent. Shelter costs are up by 5.6 per cent.
Economists had been expecting the rate to decline slightly from the 40-year high of 8.6 per cent reached the month before, but instead it ticked even higher, reaching its highest point since 1981.
Royce Mendes, an economist with financial services conglomerate Desjardins called the numbers "red hot" and says they will likely compel the U.S. central bank to raise its lending rates even more aggressively in the coming months, upping its rate by 0.75 of a percentage point in August and again in September.
"The Fed will take some relief from the fact that commodity prices and market-based inflation expectations have been falling recently. But that won't be enough to alter their near-term plans," he said in a note to clients.