U.S. Inflation Soars at 26-Year High on Energy Prices

July 16, 2008
Energy costs increased 6.5% in June.

Rising 1.1% from May, due to skyrocketing energy prices, consumer prices soared at the strongest pace in 26 years in June, the Labor Department said July 16. Core prices excluding energy and food climbed 0.3%.

Most analysts had expected a gain of 0.7% in headline inflation and a 0.2% rise in core inflation.

The monthly advance in the Labor Department's consumer price index (CPI) was the sharpest since June 1982, while the core inflation gain was the strongest since January.

Inflation picked up momentum from May, when headline inflation was up 0.6% and the core rate increased 0.2%.

On a 12-month basis, CPI was up 5% in June, the hottest annual inflation level since May 1991. Core CPI was 2.4% higher than in June 2007, the strongest rate since March.

The Labor Department said that energy prices accounted "for around two-thirds" of the rise in overall inflation, advancing 6.6% in June following a 4.4% increase in May.

Food prices climbed 0.8%.

Excluding energy and food, significant price increases were seen in several sectors. Transportation prices rose 3.8%, driven in part by a 4.5% rise in airfares, the steepest increase since March 2000.

Copyright Agence France-Presse, 2008

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