Consumer prices have risen the most since August 2008

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Steve Forbes, chairman and editor-in-chief of Forbes magazine, explains why he believes inflation has “been for a while.”

US consumer prices rose last month at the fastest pace since August 2008.

The Labor Department said Tuesday that its consumer price index rose 0.9% in June, faster than its 0.6% rise in May. Analysts polled by Refinitiv had expected a gain of 0.5%.

Used car prices are heading towards inflation for Chairman Powell

Used car prices rose 10.5% last month, which is more than a third of the increase. Additionally, energy prices were up 1.5% month over month, and food prices were up 0.8%.

Prices are up 5.4% year over year and have been trending higher every month this year. Analysts polled by Refinitiv expected prices to rise 4.9% annually.

The annual data has “basic effects” skewed by the drop in prices that occurred at the start of the pandemic.

Core prices, which exclude food and energy, rose 0.9% in June, faster than the 0.7% increase recorded in May. The annual increase of 4.5% was the largest since November 1991.

The higher prices seeped into large sectors of the economy as companies struggled to correct supply chain bottlenecks that occurred as a result of the pandemic. Some companies are also struggling to find workers as supplemental unemployment benefits have encouraged workers to stay at home.

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The Fed insisted that the price gains were “temporary” and that they would eventually return to pre-pandemic levels as the disruptions caused by the pandemic corrected.

However, Federal Reserve Chairman Jerome Powell acknowledged that the timing was “uncertain”.

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