U.S. Consumer Price Index
U.S. Consumer Price Index Rises to 5%
July 16, 2008
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Inflation has reached the 5% mark
for first time since 1991.
Hello inflation? The Consumer Price Index (CPI) reaches 5 percent from the 4.2 percent figure recorded last month, according to data released earlier this morning from the U.S. Department of Labor. This is the highest level for the CPI since the 5.3 percent increase in February 1991.
The CPI increased 5 percent in June from the previous level recorded in June 2007. As a result, prices have now entered the 5 percent range for the first time in 17 years, perhaps, the firmest indication yet that difficult times are on the horizon.
The CPI is a measure of the average change in prices over time of all goods and services purchased by households in the United States. Changes in the index from prices recorded for the same period the previous year are released each month by the U.S. Labor Department.
Appearing before Congress on Tuesday, Federal Reserve Chairman Ben Bernanke said 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."
Transportation, led by soaring energy prices, recorded the highest increase of the eight major expenditure categories used in compiling pricing figures for the index. For the twelve months ended June 2008, transportation prices increased 48 percent in June from the twelve month increase recorded in May.
Food and beverage prices more than doubled from May to June of this year, increasing from .3 percent to .7 percent respectively. For the twelve months ended June 2008, food and beverage increased 4.0 percent.
The Energy Index, a separate index tracked by the Labor Department, soared 42% in June from the May level. Meanwhile, food and beverage prices, increased only 4 percent in June from its May level.
