Bay Area inflation skyrocketed in June, fueled by the highest annual increase in consumer prices in nearly four decades, a brutal trend that threatens pocketbooks and paychecks, a grim report released Wednesday shows.
Consumer prices in the Bay Area hopped higher by 6.8% in June, the fastest yearly increase since 1984, the U.S. Bureau of Labor Statistics reported Wednesday. In 1984, the Bay Area inflation rate jumped 7.1%.
Nationwide, the inflation rate soared by 9.1% in June, the largest yearly increase since 1981, according to the new government survey of consumer prices in the United States.
The eye-popping jump in consumer prices intensifies the pressure on the nation’s Federal Reserve bank to dramatically hike interest rates, a last-ditch quest to ward off runaway inflation.
Yet this ongoing policy by the Central Bank is certain to shove borrowing costs drastically higher for an array of financial products, including mortgages, credit cards, vehicle loans and home equity lines of credit.
The Federal Reserve hopes that sharp and persistent interest rate hikes will cool off the hyperactive economy. But if the economy becomes too chilly, the nation could topple into a recession, unleashing a wave of job cuts and business shutdowns.
What is certain is that the stunning increases in prices mean that people have less buying power and their wages are being eroded.