Consumer Prices Surge Most Since 2005 (Not 1982)

Wednesday, July 16, 2008 | 10:19 AM

U.S. consumer prices soared in June. The stagflationary mix of rising unemployment, strained financial markets and rising inflation, painting the Federal Reserve into a box.

UPDATE: 7/16/08  3:51pm

Not-so-tiny correction: The rise in the CPI was not the worst since 1982; it's actually the worst since 2005. The BLS gave reporters inaccurate historical comparisons, but they have since corrected them. They stand by the actual numbers!)


Consumer Price Index surged 1.1% in June, almost twice the rate in May, and far above the consensus expectations of Wall Street economists, who were looking for a 0.7% rise. It was the biggest monthly gain in the inflation indicator since June 1982.  Year over year, the price index has risen 5%, the biggest 12 month jump since May 1991.

Medical care prices, meanwhile, increased a modest 0.2%, while clothing prices rose just 0.1%. These were the only bright spots, as other components posted sharp gains:

Transportation prices rose 3.8%
Airline fares swelled 4.5%
Energy prices jumped 6.6%
Gasoline prices spiked 10.1%
Natural gas prices rose 4.9%.
Food and beverage prices rose 0.7%
Commodity prices soared 1.9%  (a record monthly high).

(Charts below)

The core rate increased 2.4% from June 2007, also far more than consensus expectations.

Adding insult to injury, the Labor Department noted that "average weekly earnings of U.S. workers, adjusted for inflation, fell 0.9% in June." This means that the typical American household income is failing to keep up with rising prices.




Charts via Jake


Consumer Price Index Summary:  JUNE 2008
BLS, July 16, 2008


Wednesday, July 16, 2008 | 10:19 AM | Permalink | Comments (21) | TrackBack (0) add to | digg digg this! | technorati add to technorati | email email this post



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How long before Dick & Jane begin robbing banks?

Posted by: Chief Tomahawk | Jul 16, 2008 10:34:58 AM

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