The U.S. Bureau of Labor Statistics reported Wednesday that the cost of living rose 1.3 percent in June alone and in three of the past four months. Rising costs for gasoline, housing and food were the main drivers of the annual increase. Energy prices rose 41.6 percent last year. Food costs increased by 10.4%. Housing costs increased by 5.6%. Economists had expected the rate to ease slightly from last month’s 40-year high of 8.6 percent, but instead it ticked higher, hitting its highest point since 1981. Royce Mendes, an economist at financial services group Desjardins, called the numbers “reddish” and says they will likely prompt the US central bank to raise lending rates even more aggressively in the coming months, raising the rate by 0.75 of a percentage point August and again in September. “The Fed will be relieved that commodity prices and market-based inflation expectations have recently eased. But this will not be enough to change its near-term plans,” he said in a note to clients.
