U.S. consumer prices shot up in June at the fastest pace in 26 years with two-thirds of the surge blamed on soaring energy prices. The Labor Department's Bureau...
WASHINGTON — U.S. consumer prices shot up in June at the fastest pace in 26 years with two-thirds of the surge blamed on soaring energy prices.
The Labor Department’s Bureau of Labor Statistics reported today that consumer prices jumped 1.1 percent last month, much worse than had been expected. Energy prices rocketed upward by 6.6 percent, reflecting big gains for gasoline, home heating oil and natural gas.
The big rise in prices cut deeply into consumers’ earning power with average weekly wages, after adjusting for inflation, dropping by 0.9 percent in June, the biggest monthly decline since 1984.
The report on retail inflation followed similarly grim news on Tuesday that wholesale prices had shot up by 1.8 percent in June.
Most Read Business Stories
- 55,000 in Washington state may have to pay back thousands in jobless benefits
- 1 house, 45 offers: Homebuyers in Western Washington hard-pressed as supply remains scarce
- Boeing CEO gave up millions in pay; here's what he and other top execs earned
- Amazon's telehealth arm quietly expands to 21 more states
- Inflation isn't the big risk, with economy's recovery still uncertain
Inflation in the Seattle-Tacoma-Bremerton area, which is measured every two months by the BLS, was up 2.2 percent during the May-June period.
Over the past 12 months, consumer inflation was up 5.8 percent in the region. That is higher than the U.S. figure of 5 percent, which is the largest year-over-year gain since a similar 5 percent rise in May 1991.
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, 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.
Regionally, core inflation was up 0.8 percent for the May-June period and 4 percent over the past year. Those figures cover King, Snohomish, Pierce, Kitsap, Island and Thurston counties, and are not adjusted for seasonal variations.
Housing costs were up 1.7 percent for the two-month period and 5.7 percent for the year, while grocery prices were up 1.6 percent in May and June and 6 percent over the past year.
Federal Reserve Chairman Ben Bernanke told Congress on Tuesday that the Fed was concerned about the threats posed by rising inflation.
Bernanke said that the “upside risks to the inflation outlook have intensified lately, as the rising prices of energy and some other commodities have led to a sharp pickup in inflation and some measures of inflation expectations have moved higher.”
Bernanke’s comments underscored the bind the central bank is in, caught between a faltering economy that is struggling to overcome a prolonged housing slump and a severe credit squeeze, and the risk that inflation would move higher.
Many analysts believe that the central bank is likely to leave interest rates unchanged for the rest of the year out of concern that any tightening of credit policy could send the economy into an even worse tailspin.
— Seattle Times desk editor Bill Kossen contributed to this report.