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US sees biggest inflation surge in 30 yrs, with consumer prices rising 5.4%

US sees biggest inflation surge in 30 yrs, with consumer prices rising 5.4%
The US consumer price index jumped higher than expected in June, rising 5.4% compared to the same time last year. This marks its largest monthly gain since 2008, and the biggest surge in inflation the country has seen in 30 years.

Inflation surged 4.5% in June, surpassing the estimate of 3.8%, the US Labor Department reported on Tuesday. With the exception of food and energy, this is the largest shift the indicator has seen since September 1991.

Higher inflation was reflected by the surge in the consumer price index, or CPI, which saw its biggest increase since the 2008 global financial crisis.

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Influenced by issues with supply chains and a sharp increase in consumer demand amid the retreat of the pandemic, the CPI surged in sectors of the US economy which were more influenced by the shutdown than others. These include the used car market, which amassed about one third of the total CPI increase, as well as air fares and transportation costs.

Food and energy prices also added to the index, increasing 0.8% and 1.5% respectively. The gasoline index jumped 2.5% in June.

According to a New York Fed survey released on Monday, consumers may expect a further surge in prices, up to 4.8% in the next 12 months. However, another report, from Bank of America on Tuesday, states that inflation is a temporary issue, citing professional investors.

Upon its publication, the Labor Department’s report prompted a plunge in US stock market futures on Tuesday, while government bond yields showed a mixed reaction.

For more stories on economy & finance visit RT's business section

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