U.S. consumer prices in June rose by the biggest amount since 1982 on a continued surge in gasoline prices, adding more weight to an economy struggling through a strained banking system and the worst housing downturn in decades, a government report on Wednesday showed.
The Consumer Price Index, the government's key measure of inflation, advanced 1.1 percent during the month, the biggest monthly rise since June 1982, the Labor Department said. That was well above the 0.7 percent increase economists polled ahead of the report were expecting.
Prices were up 5 percent from a year ago, the biggest year-on-year rise since 1991 the department said. That gain was also considerably higher than the 4.5 percent rise Wall Street economists were expecting.
Excluding volatile food and energy prices, the so-called core CPI rose by a more tame 0.3 percent, but that rise was still higher than the 0.2 percent gain expected.
Energy prices advanced 6.6 percent during the month, reflecting a 10.1 percent surge in gasoline prices as consumers are paying well in excess of $4.00 a gallon. The department said energy costs accounted for roughly two-thirds of the overall monthly increase in consumer prices.
Euro area annual inflation up to 4.0%
Euro area annual inflation was 4.0% in June 20082, up from 3.7% in May. A year earlier the rate was 1.9%. Monthly inflation was 0.4% in June 2008. EU annual inflation was 4.3% in June 2008, up from 4.0% in May. A year earlier the rate was 2.1%. Monthly inflation was 0.4% in June 2008.
These figures come from Eurostat, the Statistical Office of the European Communities.
Inflation in the EU Member States
In June 2008, the lowest annual rates were observed in the Netherlands (2.3%), Germany and Portugal (3.4% each), and the highest in Latvia (17.5%), Bulgaria (14.7%) and Lithuania (12.7%). Compared with May 2008, annual inflation rose in twenty-one Member States, remained stable in two and fell in three.
The lowest 12-month averages4 up to June 2008 were registered in the Netherlands (1.7%), the United Kingdom (2.4%), Denmark and Sweden (2.6% each), and the highest in Latvia (14.5%), Bulgaria (11.7%) and Estonia (9.7%).
Euro area
The main components with the highest annual rates in June 2008 were transport (7.1%), food (6.4%) and housing (6.1%), while the lowest annual rates were observed for communications (-1.6%), recreation & culture (0.1%) and clothing (0.7%). Concerning the detailed sub-indices, fuels for transport (+0.69 percentage points), heating oil (+0.40) and milk, cheese & eggs (+0.21) had the largest upward impacts on the headline rate, while garments
(-0.20), cars and telecommunications (-0.18 each) had the biggest downward impacts.
The main components with the highest monthly rates were transport (1.4%), housing and hotels & restaurants (0.6% each), and the lowest were clothing (-0.7%), communications (-0.1%), recreation & culture and education (0.0% each). In particular, fuels for transport (+0.18 percentage points), heating oil (+0.06) and accommodation services (+0.03) had the largest upward impacts, while garments (-0.07), vegetables (-0.05) and rents (-0.02) had the biggest downward impacts.
