The U.S. Consumer Price Index jumped by 5.4% in the 12 months through June, exceeding the 4.9% increase expected by economists.

Core CPI, which excludes food and energy prices, rose 4.5% year over year, also higher than economists’ expectations of a 4% increase. On a month-to-month basis, consumer prices rose 0.9%, higher than the expected 0.5%, and accelerating from May's 0.6% pace. Excluding food and energy, the index also rose 0.9% on the month.

The CPI report, released Tuesday by the U.S. Labor Department’s Bureau of Labor Statistics (BLS), shows an economy that’s working through supply constraints while trying to meet increasing demand as the country reopens, with business lockdowns ending and coronavirus vaccines reaching more people.

This was the fastest one-month increase since June 2008, according to the Labor Department.

"Many of the same indexes continued to increase, including used cars and trucks, new vehicles, airline fares and apparel," the Labor Department wrote. "The index for medical care and the index for household furnishings and operations were among the few major component indexes which decreased in June."

Used car prices will reverse, said Ian Shepherdson, chief U.S. economist for the forecasting firm Pantheon.

"Auction prices soared in the spring because rental companies had to rebuild their fleets quickly to meet rebounding demand, but had to buy used vehicles at auction because the chip shortage meant they could not find sufficient numbers of new vehicles," Shepherdson said. "This drove up auction prices, and the increase has then been magnified by dealers taking the opportunity to add extra margin on top. But auction prices dipped in June, and the next few months likely will bring steep declines as the fleet buyers leave the market.”

Rising rents caused shelter costs to rise 0.5% month over month.

"Rents are the biggest element of the core CPI, accounting for 41% of the index, and they are now rising slightly faster" than before COVID-19, Shepherdson added. "We expect a further gradual acceleration, given the surge in home prices, the low vacancy rate and faster wage growth"

The CPI report is particularly important for some cryptocurrency investors who view bitcoin as a hedge against inflation and currency debasement.