US consumer prices shot up 0.8% in July, twice the expected rate, pushed higher by surging energy and food costs, the AP reports. The spike left inflation running at 5.6%, the fastest pace in 17 years, the Labor Department reported today. It marked the third straight month of soaring prices, following jumps of 0.6% in May and 1.1% in June.
The core inflation figure was driven by increases in the cost of clothing and airline tickets. But with energy and food prices retreating this month, and the dollar gaining, the Wall Street Journal predicts the report isn't likely to lead the Fed to raise interest rates. Concern will still be focused on rising unemployment and weakening consumer spending.