The United States witnessed its biggest surge in annual inflation in over a decade in June, reports AFP quoting government data. The data challenges the narrative of the Biden administration that the price spike will fade in the coming months.

With a national program to vaccinate its citizens underway, America has relaxed several restrictions that had been imposed in the peak of the COVID-19 pandemic. This has resulted in Americans resuming spending and travelling but they have been hit by rising prices for used cars, gasoline, hotels and high airline fares.

That trend could undermine already-tentative support for President Joe Biden‘s economic plan, including his massive jobs and infrastructure proposals.

In the 12 months ended in June, the consumer price index (CPI) rose 5.4%, the Labour Department said. This is the highest spike in CPI since August 2008.

The easing of restrictions has been a boon for businesses, but they are now facing supply bottlenecks which are in turn affecting production.

Energy prices have again shot up after hitting rock bottom in the midst of COVID shutdowns. The oil prices have also gone up due to the OPEC+ producers’ failure to boost output. Gasoline shot up by an unadjusted 45.1% over the past year and 2.5% in the month of June, the report said.

Food prices rose a comparatively modest 2.4% for the year ended in June, and 0.9% in the month, according to the data.

The White House Council of Economic Advisers pointed to temporary factors driving inflation, and cautioned that “the recovery from the pandemic will not be linear.”

But economists still say they expect inflation to start trending down in coming months, but noted that price pressures persist.

After the release of the inflation data, the Wall Street stocks fell from a record high. The dollar, on the other hand, rallied as US recorded its biggest jump in inflation in over a decade.