The latest report released by The U.S. Bureau of Labor Statistics states that inflation in the month of June 2022 is up to 9.1% before seasonal adjustment. Meaning that goods and services were 9.1% more expensive in June 2022 than in June 2021. This is the largest over the year increase even surpassing the record breaking rate of March 2022 of 8.5%. Over the month the CPI increased by 1.3% in June when compared to May.
Source: BLS
The energy sector faced a high rate of inflation of 41.6% when compared to June 2021. More specifically, what mostly influenced this rate was the 98.5% inflation on Fuel Oil and 59.9% increase of price for Gasoline. The spike in prices has been increasing since January 2022, but interestingly when comparing the CPI for fuel oil in June 2022 to May 2022, there was actually a -1.2% decrease; the first time it had a decrease since December 2021.
The food sector reached a high rate of inflation of 10.4%, over the year and when compared to last month a 1%. The increase of food prices will not only affect the prices in restaurants, but also those in grocery stores. Though over the month there aren’t any significant increases, when comparing the rates with the previous year it becomes concerning because food is a necessity.
The rise in food inflation can be mostly caused by supply chain issues. Because transportation and delivery of stock in grocery stores has seen an increase in prices. Due to the inflation that can be observed in fuel oil and gasoline, transportation services have also increased prices. In the month of June Transportation services had an 8.8% increase when compared to the previous year. This explains why food at home saw a larger rate of inflation (12.2%) than food away from home (7.7%).
It is projected that the Federal Reserve’s remedies to settle the consistent inflation this year, won’t only bring good consequences. Said remedies might be harmful to people who are vulnerable to losing their jobs. Ultimately, dealing with the spike in inflation will be harmful in the short-term future and should be helpful in the long term future.
