Prices Pop Again, Putting Fed and White House on Defensive

The Consumer Price Index spiked, climbing 5.4 percent in the year through June as used-car prices picked up rapidly.

A key measure of inflation spiked in June, climbing at the fastest pace in 13 years as prices for used cars, hotel stays and restaurant meals surged while the economy reopens. The Consumer Price Index jumped by 5.4 percent in the year through June, the Labor Department said on Tuesday, the largest year-over-year gain since 2008 but one that is expected to fade as the economy moves past a volatile reopening period. The Biden administration quickly pointed out that much of the move was tied to temporary supply issues: Prices for previously owned cars and trucks rocketed higher and accounted for more than a third of the increase. Yet the White House and Federal Reserve are fixated on inflation data because it has risen faster than many had expected — and the pop might last longer than they had hoped. The administration maintains that price gains will be temporary. But inside the White House, aides have in recent weeks concluded that strong increases could linger for a year or more, according to two administration officials.