Inflation hits another 40-year high. What's that mean for shoppers and the next Fed rate hike?

Inflation jumped again in June on a persistent climb in gas, food and rent costs, notching another 40-year high and likely solidifying the Federal Reserve’s plans for another big rate hike this month.

Prices increased 9.1% from a year earlier, up from an annual rate of 8.6% the prior month and the largest gain since November 1981,the Labor Department's Consumer Price Index showed Wednesday. Economists surveyed by Bloomberg had estimated inflation would rise to 8.8%.

On a monthly basis, consumer prices increased 1.3%, compared with a 1% rise in May.

The report bolsters the Federal Reserve's plans to raise its key interest rate by a hefty three-quarters of a percentage point for a second straight month as part of an aggressive campaign to curtail inflation.

June’s surge again was led by gasoline prices, which increased 11.2% and 59.9% annually. The good news is unleaded regular averaged $4.65 Tuesday, down from $5 a month ago.

Grocery prices rose 1% and 12.2% over the past 12 months. Both gas and food costs have been elevated largely because Russia’s war in Ukraine has disrupted global supplies of oil, wheat, corn and other commodities.

Last month, cereal prices rose 2.5% and were up 14.2% from a year ago. Bread was up 1.6% from the prior month and climbed 10.8% annually. Chicken costs increased 1.5% from May and 17.3% yearly.

There were some encouraging signs. Bacon prices fell 1.9%, its second straight large monthly decline. And beef and veal prices decreased by  2.3%.

Commodity prices have tumbled recently amid recession fears and ebbing consumer demand. That already has pushed down gas prices and set the stage for more moderate food price increases within months, says Wells Fargo economist Sam Bullard.

Barclays economist Pooja Sriram, however, believes higher fertilizer costs for farmers could keep grocery prices fairly high throughout the year. Russia is the leading exporter of fertilizer and the Ukraine war has driven up the cost of that commodity as well as its chief ingredient, natural gas.

Core prices, which exclude volatile food and energy items, increased 0.7% in June following a 0.6% rise the prior month, That nudged down the annual rise to 5.9% from 6% in May.