U.S. inflation rises to highest annual rate since 1981

STORY: Inflation in the U.S. shot up even more than expected in June, accelerating at the fastest pace since 1981.

Data out Wednesday from the U.S. Labor Department showed the consumer price index jumped 9.1%, as gas prices hit record highs last month and food costs stayed elevated.

John Leer is chief economist at Morning Consult.

“Everyone expected inflation to be high given how rapidly gas prices had risen. I mean, that's a, it's a really important driver in inflation, particularly for folks who live in suburban and rural areas. It's a, it's a large share of their total monthly expenses. I think what's surprising is, like I said, just how dramatically those elevated gas prices and energy prices have flowed throughout the economy, particularly when we go look at - food is another sector. But then I would note things like shelter and new and used cars continue to rise as well.”

The CPI report adds further momentum for the Federal Reserve to hike interest rates by 75 basis points later this month.

War in Ukraine, global supply chains snags and massive fiscal stimulus in the prior two years have driven consumer prices higher.

Wednesday's inflation data followed stronger-than-expected job growth in June, and boosted wages are contributing to higher prices for services.

That's presented the Fed with a tough task, as it tries to cool demand in the economy to bring inflation down.

The worse-than-expected CPI report for June led some investors to bet the central bank could deliver an even bigger interest-rate hike at its policy meeting later this month, further stoking fears of a recession by early next year.

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