Inflation hits 40-year high of 9.1% in US

WASHINGTON－US consumer price inflation surged 9.1 percent over the past 12 months to June, the fastest increase since November 1981, according to government data released on Wednesday.

Driven by record-high gasoline prices, the consumer price index jumped 1.3 percent in June, the Labor Department reported.

However, excluding volatile food and energy prices, the so-called core CPI increased 5.9 percent over the past year, slowing from the pace in May, according to the data. But the rate rose 0.7 percent compared to May, up slightly from the prior two months.

Energy contributed half of the monthly increase, as gasoline jumped 11.2 percent in June and a staggering 59.9 percent over the last 12 months.

The conflict in Ukraine has pushed global energy and food prices higher, and US gas prices at the pump last month hit a record of more than $5 a gallon. However, prices have eased in recent weeks.

Some economists have held out hope that inflation might be reaching or nearing a short-term peak. Gas prices, for example, have fallen from the $5 a gallon reached in mid-June to an average of $4.63 nationwide on Wednesday－still far higher than a year ago but a drop that could help slow inflation for July and possibly August.

Tumbling approval ratings

The spike in inflation has diminished consumers' confidence in the economy, sent President Joe Biden's approval ratings tumbling and posed a major political threat to Democrats in the November congressional elections. Forty percent of adults said in a June AP-NORC poll that they thought tackling inflation should be a top government priority this year, up from just 14 percent who said so in December.

Some 93 percent of small business owners are worried that the United States will enter a recession in the next six months, a survey released by Goldman Sachs showed on Wednesday, with a majority of firms saying the country was headed in the wrong direction.

In the same survey a year ago, with increased vaccinations, businesses were more optimistic and 67 percent said the US was headed in the right direction. That has reversed in the latest version, with 61 percent of responding firms saying the US was on the wrong track.

On Tuesday, the International Monetary Fund slashed the country's growth forecast for 2022 to 2.3 percent, just less than a month after it cut the forecast to 2.9 percent. In April, the IMF projected the US' GDP to grow by 3.7 percent this year.

Agencies - Xinhua