Inflation Surges

Consumer price inflation rose higher in June than the experts were expecting, according to some new numbers from the Labor Department.

A key measure of inflation – the Consumer Price Index for All Urban Consumers (CPI-U) — increased 0.9 percent in June on a seasonally adjusted basis after rising 0.6 percent in May, the U.S. Bureau of Labor Statistics reports.

This was the largest 1-month change since June 2008 when the index rose 1 percent.

Over the last 12 months, the all items index increased 5.4 percent before seasonal adjustment; this was the largest 12-month increase since a 5.4-percent increase for the period ending August 2008.

Economists polled had been expecting to see around a 5 percent rise.

The index for used cars and trucks continued to rise sharply, increasing 10.5 percent in June. This increase accounted for more than one-third of the seasonally adjusted all items increase. The food index increased 0.8 percent in June, a larger increase than the 0.4-percent increase reported for May.

The energy index increased 1.5 percent in June, with the gasoline index rising 2.5 percent over the month.

The index for all items less food and energy rose 0.9 percent in June after increasing 0.7 percent in May. Many of the same indexes continued to increase, including used cars and trucks, new vehicles, airline fares, and apparel.

The index for medical care and the index for household furnishings and operations were among the few major component indexes which decreased in June.

The all items index rose 5.4 percent for the 12 months ending June; it has been trending up every month since January, when the 12-month change was 1.4 percent.

The index for all items less food and energy rose 4.5 percent over the last 12-months, the largest 12-month increase since the period ending November 1991.

The energy index rose 24.5 percent over the last 12-months, and the food index increased 2.4 percent.

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