The US Department of Labour (DOL) reported on the 10th of June that the inflation rate in the US reached a 40-year high of 8.6%, which has put pressure on employers to raise wages to keep pace.

In April, the Consumer Price Index (CPI) went down to 8.3% from the March high of 8.5%. And according to the latest CPI report the energy index rose by 3.9%.

The long-term average inflation in the US is usually around 3.2% although consumers are used to moderate annual price increases averaging 1.75% between 2010 and 2019.

Gas prices have also soared across the US approaching $5 per gallon this week which is $1.90 more than it was a year ago.

Other major index components have also increased. The food index rose by 1.2% in May while the food at home index increased by 1.4%.

The news sent stock markets crashing. The S&P 500 and Dow indices fell over 2% and Nasdaq was down over 3.5%.

Featured image source:  Bloomberg.com