• U.S. consumer prices post largest gain in 13 years; inflation has likely peaked

    14 Jul 2021 | Economic News
  

U.S. consumer prices post largest gain in 13 years; inflation has likely peaked

U.S. consumer prices increased by the most in 13 years in June amid supply constraints and a continued rebound in the costs of travel-related services from pandemic-depressed levels as the economic recovery gathered momentum.

 

With used cars and trucks accounting for more than one-third of the surge in prices reported by the Labor Department on Tuesday, economists continued to believe that higher inflation was transitory, aligning with Federal Reserve Chair Jerome Powell's long-standing views.

 

The yield on the benchmark 10-year Treasury note briefly shot up before retreating as investors concluded that the U.S. central bank would likely maintain its ultra easy monetary policy stance for a while. Powell will present the semiannual Monetary Policy Report to the U.S. Congress on Wednesday.

The consumer price index increased 0.9% last month, the largest gain since June 2008, after advancing 0.6% in May. Economists polled by Reuters had forecast the CPI would climb 0.5%.





In the 12 months through June, the CPI jumped 5.4%. That was the largest gain since August 2008 and followed a 5.0% increase in May. Excluding the volatile food and energy components, the CPI accelerated 0.9% after increasing 0.7% in May. The so-called core CPI surged 4.5% on a year-on-year basis, the largest rise since November 1991, after advancing 3.8% in May.


Reference: Reuters

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