Inflation continued to surge as the consumer price index rose by 9.1% in June compared to last year. It was an increase of 1.3% from May. Economists expected inflation to increase by 1.1% from May to June and top out at 8.8% for the last 12 months. It is the fastest increase in inflation since 1981.
According to the latest data from the Bureau of Labor Statistics, the biggest driver of inflation was energy prices, which rose by 7.5% from May and have jumped by 41.6% over the past 12 months. While the cost of gasoline has been dropping since reaching record highs, it was still up by 11.2% from May to June.
The price of food was also higher, rising by an average of 1% last month. In addition, the cost of shelter was 0.6% higher, and the average cost of rent increased by 0.8%, the largest monthly increase since 1986.
In more bad news for workers, the BLS noted that inflation-adjusted incomes fell by1% for the month and are down 3.6% from last summer.
The higher-than-expected increase caused stocks to tank in early trading, with the Dow Jones Industrial Average, the Nasdaq, and the S&P 500 all in the red.
“CPI delivered another shock, and as painful as June’s higher number is, equally as bad is the broadening sources of inflation,” said Robert Frick, corporate economist at Navy Federal Credit Union, according to CNBC. “Though CPI’s spike is led by energy and food prices, which are largely global problems, prices continue to mount for domestic goods and services, from shelter to autos to apparel.”