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.
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
Transportation prices rose 3.8%
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