On Tuesday, US Labour Department data had unveiled that its index for US Consumers Prices – the changes in prices paid off by the Americans for goods and services at a given period of time - had accelerated by the most in thirteen years in June, as a sharp shoot-up in prices of used vehicles alongside trucks had represented more than a third of the gains in CPI (Consumer Prices Index) last month.
On top of that, latest uptick in US Consumer Prices Index raised a blazing question for US Federal Reserve on how it would plan to deal with what seemed to be a long period of inflation-surge, though a cluster of analysts had still been contemplating that a latest upsurge in inflation indicators would be ‘transitory,’ which has been well in line with the US Fed Chair Jerome Powell’s previous remarks.
On the contrary, although a third of the gains in CPI had been stemmed off a rise in used vehicles’ prices, a worsening supply restrains alongside a steeper-than-anticipated shortage of raw materials would more likely to push the US inflation indicators higher over coming months, suggested another perspicacious bunch of analysts.
Besides, a meteoric rebound in travel and hospitality industry following nearly 15-month long pandemic-led restrictions had added to further boost-up in US CPI as economy gathers traction following an acceleration in vaccination campaign with more than 155 million Americans having been fully inoculated.
US CPI rises by the most in 13 years
According to US Labour Department data, the US Consumer Prices Index gained 0.9 per cent in June, marking up the largest since the June of 2008, that followed an upsurge of 0.6 per cent in May, beating an analysts’ estimate of 0.5 per cent, while the prices of used vehicles soared 10.5 per cent, which happened to be the strongest jump since the Government had begun to track the data back in the January of 1953.
In tandem, on a year-on-year basis, US Consumer Prices Index gained 5.4 per cent, while the core CPI, a critical indicator to US inflation outlook, climbed as much as 4.5 per cent in June compared to the same time a year earlier.
Meanwhile, addressing to a cataclysmic clout lurking around the US economy with US Fed pledged to remain dovish, a corporate economist with Navy Federal Credit Union in Vienna, Virginia, Robert Frick said, “June's CPI numbers looked scary, but once again, we see that it was mainly temporary price increases that pumped up the figures. Overall, this report is consistent with inflation cooling off later this year. ”