The consumer price index, the United States’ barometer of inflation, jumped 0.9% in June, the largest one-month increase in 13 years. The increase over the past 12 months was 5.4%, the biggest increase in annual inflation in nearly 13 years, according to Axios.
Much of the inflation is driven by gas and car prices, with the inflation of the cost of used cars rising 45.2% in June. Oil and gas sales sank in the early months of the coronavirus pandemic, but now the prices have soared 45.1% compared to last year, as travel and transit resumes.
The rising car prices is due to a combination of factors: rising consumer demand, a shortage of the chips need to build the cars, and that many rental car services shortsightedly sold their fleets at the beginning of the pandemic in order to raise funds, but now do not have enough cars, according to CNN.
Some of the fast rising prices indicate consumers are eager to return to socializing and traveling, with hotel room prices rising 7.9% and dress prices rising 5%.
Although inflation is cause for concern, the Federal Reserve has said it believes the inflation bubble will pass. Economists say the inflation is a result of the economy recovering rapidly from a pandemic-induced recession, making price rises seem extreme even when they are not necessarily rising substantially more than the average prices pre-pandemic.