Consumer Prices Surge Most Since '91

Consumer prices up 1.1%; wholesale up 1.8%.
By Kevin Spak,  Newser Staff
Posted Jul 16, 2008 9:35 AM CDT
The Fed has long said America doesn't face 1970-style inflationary pressures, but the data don't look good.    (Shutterstock)
camera-icon View 2 more images

(Newser) – Consumer prices rose a staggering 1.1% in June, Bloomberg reports. The figure far surpassed analyst estimates, and brings the year-over-year figure to 5%–the biggest surge since 1991. Core inflation, which excludes food and energy, rose a more-than-expected 0.3%. “Inflation has galloped,” one economist said. “It puts the Fed in a really tricky position. I don't see how they can change rates this year.”

Wholesale prices saw an even steeper increase, rising 1.8% in June and 9.2% year-over-year. And while prices were skyrocketing, unemployment rose and wages fell an inflation-adjusted 0.9%, which analysts fear portends a big drop in spending. But the Fed seems wary of increasing rates, the Wall Street Journal reports. Ben Bernanke said yesterday that he expects inflation’s rise to be temporary.