WASHINGTON (AP) – U.S. inflation likely reached a new 40-year high in June, driven up by a spike in gas costs, more expensive food and rent, and pricier cars and hotel rooms.
A government report Wednesday was expected to show that consumer prices soared 8.8% in June, but that number came in above projections at 9.1% over the past year, highest rate in 4 decades.
Surging gas prices are mostly to blame for the surge, along with higher costs for food and rent. sealing Analysts say the new rate likely seals the case for another large interest rate hike by the Federal Reserve, with higher borrowing costs to follow. On a monthly basis, prices rose 1.3% from May to June, another substantial increase, after prices had jumped 1% from April to May.
Higher rates are intended to cool consumer and business spending and slow the economy and inflation.
(Copyright Associated Press)
