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| Photo Credit: CNN. |
U.S. inflation rate surged to a new 40-year high of 9.1% in June 2022 representing the biggest 12-month increase since 1981, the government said Wednesday, according to The Associated Press.
Surging
prices for gas, food and rent capitulated U.S. inflation to a new four-decade
peak in June and hence further pressuring households and likely sealing the
case for another huge interest rate hike by the Federal Reserve, The Associated
Press reports.
Any interest
rate hike would probably lead to higher borrowing costs which increases the cost
of doing business in the United States.
In May Consumer
prices stood at 8.6% which rose 1.3% from May to June, compared with the 1%
rise from April to May.
The cost of
necessities is rising much faster than average incomes and this is having a
punishing impact on most Americans on the low income threshold especially Black
and Hispanic Americans who have to pay more for the basic essentials of life
such as housing, transportation and food.
According to
The Associated Press, gas prices have fallen from $5 a gallon reached in mid-June
to an average of $4.66 nationwide as of Tuesday, far higher than a year ago but
a drop that could slow inflation for July and possible August.
The
continuous spike in inflation has caused a steep drop in consumers’ confidence
which could in turn affect the fortunes of the economy.