US inflation hits highest rate in 4 decades
US Inflation soared 9.1% compared to last year. Surging prices for gas, food and rent catapulted inflation to a new 40 year high in June, further pressuring households and likely forcing another large interest rate hike by the Federal Reserve. (July 13) (AP Video/ David R. Martin)
AP
Inflation hit another record high last month. There are some signs that inflation is abating, but you’ll have to squint to see them.
There were some obvious culprits to last month’s 1.3% rise in inflation that put the annual rate of inflation in the U.S. at 9.1%. For instance, gas prices, which rose by 11.2%, accounted for nearly 40% of the overall price level increase. And housing, which rose by 0.8%, accounted for 26% of the overall increase.
But a deeper dive into the individual items the Consumer Price Index tracks reveals that some of the biggest price increases last month were kitchen staples. Overall food prices increased by 1% last month, accounting for 10% of the overall price level increase.
Inflation hits another 40-year high: What does that mean for shoppers and the next Fed rate hike?
Inflation shows signs of easing: But that probably won’t stop a 40-year high and a big Fed hike
Butter and margarine
Behind gas and energy prices, margarine saw the highest percentage price increase last month at 6.8%. Butter price increases were slightly lower at 4.8%.
Over the past 12 months, margarine and butter prices are up 34.5% and 21.3%, respectively, not seasonally adjusted.
Butter in particular has suffered from slower than expected milk production per cow according to the U.S. Department of Agriculture forecasts. Cows are producing less milk in part because feeding costs have gone up, the USDA said. That may be causing more consumers to switch to margarine and other non-dairy substitutes.
Why your wallet will be hurting: Prices don’t drop when inflation eases
Food inflation: Surging prices could fuel child hunger – and families are scared months before midterms
Flour
Flour prices rose by 5.3% last month, and are up 19.2% over the past 12 months at a nonseasonally adjusted rate. The war in Ukraine has taken a big toll on wheat prices since Ukraine and Russia are some of the world’s biggest wheat exporting countries. Bad weather in the U.S. also contributed to softer than usual wheat production. But wheat prices have started to come down recently.
Hot dogs
Hotdog prices rose by 4.5% last month, and are up 16.3% over the past 12 months at a non-seasonally adjusted rate. Meanwhile, Costco’s CEO vowed to keep the retailer’s legendary hot-dog-and-soda combo at $1.50.
Prices for other meat products including bacon, pork chops, beef, and veal, however, decreased last month.
Elisabeth Buchwald is a personal finance and markets correspondent for USA TODAY. You can follow her on Twitter @BuchElisabeth and sign up for our Daily Money newsletter here
