If this continues, Americans will see an economic collapse on the way.
The Consumer Price Index (CPI) soared 9.1 percent year-over-year compared to the 8.8 percent and 8.6 percent in previous months. The 1.3 percent month-on-month rise is the steepest since 2005 and the 9.1 percent year-over-year is the highest since 1981.
Moreover, real commodity prices show that it is actually much higher than 9.1 percent, showing that the economy is actually in big trouble.
Goods inflation is seen to be slowing, but services costs are soaring at their fastest. Energy costs dominated the rise, while the rent index increased 0.8 percent over the month, its highest increase since April 1986.
Motor vehicle maintenance and repair index increased 2.0 percent in June, the highest increase since September 1974. Dental services also increased 1.9 percent, the industry's largest monthly change since 1995.
Excluding the volatile food and energy prices, the so-called core CPI increased 5.9 percent, compared to the 5.7 percent estimate. Core inflation peaked at 6.5 percent in March and has been slowing down since.
Much of the rise came from gasoline prices, which increased 11.2 percent on the month and just shy of 60 percent for the 12-month period. Electricity costs also rose by 1.7 percent from the previous month and up 13.7 percent from last year.
Airline fares were one of the few areas that saw a decline, falling 1.8 percent in June, but still up 34.1 percent from a year ago.
Meat, fish and poultry as well as eggs also dropped 0.4 percent for the month, but it was still up 11.7 percent year on year.
James Knightley, ING's chief international economist, said it is the breadth of the price pressures that are really concerning. "With supply conditions showing little sign of improvement the onus is for the Fed to hit the brakes via higher rates to allow demand to better match supply conditions. The recession threat is rising," he said.
Every month, headline CPI rose 1.3 percent and core CPI increased 0.7 percent compared to estimates of 1.1 percent and 0.5 percent. When put together, the numbers seem to counter the narrative that inflation is peaking, but the CPI delivered another shock as it showed broadening sources of inflation.
"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," said Robert Frick, a corporate economist at the Navy Federal Credit Union.
The inflation reading could push the Federal Reserve into an even more aggressive position as traders increased their bets on the pace of interest rate increases ahead. (Related: Wells Fargo CEO warns American economy unprepared for Fed interest rate hikes.)
Prices increase, but wages continue to fall
While prices have been increasing, real wages have fallen dramatically as inflation gripped the economy. The average American's purchasing power is falling domestically by a record 3.6 percent year-over-year in June.
The White House continues to blame the rise in prices on Russia's invasion of Ukraine. Despite inflation already moving aggressively before the attack in February, President Joe Biden has called on gas station owners to lower prices.
The administration and leading Democrats have also blamed what they called "greedy corporations" for using the pandemic as an excuse to raise prices. However, the after-tax profits of these corporations have only increased 1.3 percent in aggregate since the second quarter of 2021. (Related: Survey says: More Americans are struggling financially due to inflation and rising gas prices.)
Biden has made it clear that tackling inflation is his top priority, repeating previous calls for oil and gas companies to lower their prices and Congress to vote on legislation that will reduce costs for various products and services.
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