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
Consumer Prices Surge Most Since '91
The Fed has long said America doesn't face 1970-style inflationary pressures, but the data don't look good.    (Shutterstock)

(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. (Read more core inflation stories.)

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