Prices for a quart of milk, a plane ticket and a host of other products rose in June at nearly the fastest pace in a generation ...
WASHINGTON — Prices for a quart of milk, a plane ticket and a host of other products rose in June at nearly the fastest pace in a generation — yet another economic shock wave that alarmed analysts and took a bite out of the buying power of Americans.
Consumer prices nationally rose 1.1 percent in June from the month before, far faster than the expected rate of 0.7 percent and almost double the reading from May, the U.S. Bureau of Labor Statistics (BLS) said Wednesday.
The only time in the past quarter-century that monthly inflation has been that high was in September 2005, when prices jumped 1.3 percent, mostly because Hurricane Katrina shut down oil refineries and energy prices spiked.
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And consumer prices across the U.S. are up 5 percent over the past 12 months, the fastest one-year change since 1991.
Locally, the inflation rate over those 12 months was even higher, reaching 5.8 percent in the Seattle-Tacoma-Bremerton area, according to the BLS figures. Gas prices here helped drive up that figure, rising 36 percent since June 2007.
The overall inflation rate for the Seattle area is measured by the government every other month (although some categories are measured monthly), and it was up 2.2 percent during the May-June period.
Food prices across the U.S. also showed a big increase in June, rising by 0.7 percent, more than double the 0.3 percent increase of May. Vegetable prices shot up by 6.1 percent, the biggest increase in nearly three years.
Core inflation in the U.S., which excludes energy and food prices, showed rising pressures, too, with an increase of 0.3 percent in June, up from a 0.2 percent gain in May and the biggest one-month rise since January. This increase reflected a 4.5 percent jump in airline-ticket prices, the biggest one-month rise for airline fares since March 2000.
In the Seattle area, core inflation was up 0.8 percent for the May-June period and 4 percent over the past year.
The broad category of housing costs, which covers renters and homeowners and also includes the cost of utilities, was up 1.7 percent for the two-month period and 5.7 percent for the year in the Seattle area. Grocery prices here were up 1.4 percent over the past two months and up 6 percent since June 2007.
The regional figures cover King, Snohomish, Pierce, Kitsap, Island and Thurston counties.
As prices rose last month, take-home pay across the nation took a hit. Adjusting for inflation, weekly wages fell 0.9 percent in June, the third straight monthly decline and the biggest drop in almost four years.
The news was the back half of a one-two punch on inflation. On Tuesday, the Labor Department reported that prices at the wholesale level were rising by the highest annual rate in 27 years.
Before Congress, Federal Reserve Chairman Ben Bernanke wrapped up two days of testimony and repeated his concerns about inflation, also noting the housing slump, financial turmoil and credit troubles.
“We will work our way through these financial storms,” he said.
— Seattle Times desk editor Bill Kossen contributed to this report.