June inflation rate second highest in a generation
David Lightman | McClatchy Newspapers
last updated: July 16, 2008 01:20:14 PM
WASHINGTON — Soaring energy costs helped boost consumer prices 1.1 percent in June, the second biggest monthly increase in 26 years, the Labor Department reported Wednesday.
The sudden burst of inflation, higher than analysts had expected, deeply affected consumers' spending power.
The department reported that the average weekly inflation-adjusted wage was down 0.9 percent, the biggest monthly drop in nearly two years.
The increase in the Consumer Price Index, the government's chief measure of price movements, was topped in recent years only by a spike in prices in September 2005, reflecting an increase in energy prices after Hurricane Katrina.
Last month, energy again was the culprit. The department's report found that the index for energy was up 6.6 percent last month, after a 4.4 percent rise in May. The June energy increase accounted for about two-thirds of the overall jump in the Consumer Price Index.
But prices of nearly everything else also were up. Food prices jumped 0.8 percent, with the cost of four of the six major grocery store food groups "sharply accelerating," the department said.
Inflation is now on its most accelerated pace in years; prices have gone up 5 percent over the last 12 months. Energy is up 29.1 percent over the year, after jumping 17.4 percent last year.
The inflation news cooled market enthusiasm early Wednesday. Oil prices were down by $6 a barrel on concerns that consumption would drop as the economy slowed.
Read the Labor Department report on prices at http://www.bls.gov/news.release/cpi.nr0.htm
McClatchy Newspapers 2008