Via the ever reliable: FT.com
US consumer prices rose by 5 per cent in June compared to a year earlier, the biggest yearly jump since 1991, as food and energy continued to raise the cost of living for many Americans, justifying deep concern about inflation among policymakers.Over the month, the consumer price index, compiled by the Labor Department, rose by 1.1 per cent – its largest since September 2005 in the aftermath of Hurricane Katrina. At the core level, which excludes food and energy prices and had remained relatively under control in recent months, consumer prices rose by 0.3 per cent.
Both the headline and the core CPI exceeded economists’ average expectations of increases in the range of 0.7 per cent and 0.2 per cent, respectively.
The data was released a day after Ben Bernanke, Federal Reserve chairman, told Congress that inflation risk had “intensified lately” with continued increases in oil and other commodity prices that would push overall inflation higher in the short term.
Mr Bernanke said it was “critical” that policymakers prevent higher inflation from becoming entrenched in the shape of higher inflation expectations that would feed into domestic wage and price-setting.
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