Price jump worst since '91 - NBC New York

Price jump worst since '91



    Record gas and higher food prices took the government's key inflation measure to the biggest annual jump since 1991, fanning fears that inflation pressures were much worse than expected.

    The Consumer Price Index, the measure of prices paid at the retail level, was up 1.1% in June, after a 0.6% rise in May. Economists surveyed by had been looking for only a 0.7% rise. Energy prices were up 6.6% in the month, while food prices jumped 0.8%

    Those jumps left overall prices up 5% from 12 months earlier, which is the biggest 12-month change since May 1991.

    The typical American is seeing their paycheck not keep up with price increases. A separate Labor Department report showed the average hourly wage up only 3.4% over the same 12-month period.

    The so-called core CPI, which excludes volatile food and energy prices, rose 0.3%, after a 0.2% rise. Economists had been looking for another 0.2% rise.

    The 12-month rise in core CPI is now up 2.4%, up from a 2.3% rise in that reading in May.

    The Federal Reserve is generally seen as wanting to see core inflation measures up between 1 and 2 percent, so the new reading is well outside its so-called comfort zone.

    Fed Chairman Ben Bernanke said in Senate testimony Tuesday that he sees weak economic growth ahead, but hinted that the Fed might not be able to take steps to spur economic growth due to fears about feeding inflation pressures.