Consumer Prices Surge Most Since 2005 (Not 1982)
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).
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
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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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