With gas prices falling, market analysts and economists anticipated today's inflation release by the Bureau of Labor Statistics more than usual. They hoped to see cooling numbers. That did not happen.
Prices continue to rise. The national inflation rate for June was 9.1% — the highest numbers since November of 1981, more than 40 years ago.
The climb has been rapid. In May 2020, inflation came in at 0.1%. It rose steadily until early 2021 when it surpassed 4%. From there it took only 14 months for the measure to reach 9.1%.
This isn't the country's first run-up with inflation. Inflation rates climbed in a similar fashion in 1972, although today's trends are slightly subdued. By June of 1973, inflation had already soared above 10% for four months.
There are eight metro areas in the U.S. with inflation rates above 10%. The Phoenix Metro is one of them — the second highest at 12.3%, but just behind urban Alaska. Housing and rent is a big overall driver of Phoenix rates. The housing inflation rate, which includes rent, has doubled year over year compared to the rest of the U.S. Other measured categories are at, or lower than the comparable national inflation rate. Other inflation drivers in Phoenix like fuel and utilities are up almost 10%. Gasoline is up 77%. In all, energy sources in Phoenix are up 43% year over year.
An increasing inflation rate means that the Federal Reserve could move even more aggressively on raising interest rates. There is some good news. Food and energy are extremely volatile so many economists choose to measure with what is known at the Core CPI, a measurement that does not account for them. This fell in June from over 6% to 5.9%.