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Inflation Surges By 9.1%, Driven By Record Gas Prices

(CBS/CNN) -- Inflation hit a fresh 40-year record in June, with consumer prices increasing 9.1% over the last 12 months, the Labor Department said Wednesday. It's the fastest increase in prices since 1981.

That's up from the previous reading, when prices rose by 8.6% for the year ended in May; and much higher than the 8.8% that economists had predicted, according to Refinitiv.

The Consumer Price Index for June also showed that overall prices that consumers pay for a variety of goods and services rose by 1.3% from May to June.

Much of the June increase was driven by a jump in gasoline prices. Americans faced record-high gas prices last month, with the national average topping $5 a gallon across the country.

The White House said earlier this week it was expecting "highly elevated" inflation data, citing the continued impact of Russia's invasion of Ukraine.

Stripping out food and energy costs, which tend to represent transitory fluctuations, core CPI prices rose by 0.7% over the same period and by 5.9% for the 12-month period ended in June.

The Federal Reserve pays particular attention to that core data when assessing future inflationary trends, and the latest numbers likely give the central bank a green light to continue with its aggressive series of rate hikes to cool off the economy and bring down higher prices. The Fed is widely expected to raise its benchmark interest rate by at least 75 basis points at its next monetary policymaking meeting on July 26-27.

 (©Copyright 2022 CBS Broadcasting Inc. All Rights Reserved.The-CNN-Wire™ & © 2022 Cable News Network, Inc., a Time Warner Company contributed to this report.)

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