Shafaq News / Shoppers paid sharply higher prices for a variety of goods in June as inflation kept its hold on a slowing U.S. economy, the Bureau of Labor Statistics reported Wednesday.

The consumer price index, a broad measure of everyday goods and services related to the cost of living, soared 9.1% from a year ago, above the 8.8% Dow Jones estimate. That marked the fastest pace for inflation going back to November 1981.

Excluding volatile food and energy prices, so-called core CPI increased 5.9%, compared with the 5.7% estimate. Core inflation peaked at 6.5% in March and has been nudging down since.

On a monthly basis, headline CPI rose 1.3% and core CPI was up 0.7%, compared to respective estimates of 1.1% and 0.5%.

Taken together, the numbers seemed to counter the narrative that inflation may be peaking, as the gains were based across a variety of categories.

"CPI delivered another shock, and as painful as June's higher number is, equally as bad is the broadening sources of inflation," said Robert Frick, corporate economist at Navy Federal Credit Union. "Though CPI's spike is led by energy and food prices, which are largely global problems, prices continue to mount for domestic goods and services, from shelter to autos to apparel."

The inflation reading could push the Federal Reserve into an even more aggressive position.

Traders upped their bets on the pace of interest rate increases ahead. For the July 26-27 meeting, a full percentage point move now has a better than even chance of happening, according to the CME Group's FedWatch tool as of 10:40 a.m. ET.

"U.S. inflation is above 9%, but it is the breadth of the price pressures that is really concerning for the Federal Reserve." said James Knightley, ING's chief international economist. "With supply conditions showing little sign of improvement the onus is the on the Fed to hit the brakes via higher rates to allow demand to better match supply conditions. The recession threat is rising."

(CNBC)