Read more about US consumer prices post largest gain in 13 yrs; inflation has likely peaked on Business Standard. The consumer price index increased 0.9% last month, the largest gain since June 2008, after advancing 0.6% in May.
WASHINGTON (Reuters) – 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 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. „June’s CPI numbers looked scary, but once again, we see that it was mainly temporary price increases that pumped up the figures,“ said Robert Frick, corporate economist with Navy Federal Credit Union in Vienna, Virginia. „Overall, this report is consistent with inflation cooling off later this year.“ 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%. Used cars and trucks prices accelerated 10.5%. That was the biggest jump since January 1953 when the government started tracking the series. Used cars and trucks have been the major driver of inflation in recent months. They surged a record 45.2% on a year-on-year basis. A global semiconductor shortage has undercut motor vehicle production. New motor vehicle prices also rose solidly. Demand is mostly being driven by rental companies, desperate to restock after offloading their fleets at the height of the pandemic. Industry data suggest used car and truck prices will soon cool off.
