Inflationary Pressures Continue to Grow in June

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July 16, 2008 (Prices Byte)

Inflationary Pressures Continue to Grow in June

Prices Byte by Dean Baker

For Immediate Release: July 16, 2008
Contact: Alan Barber, (202) 293-5380 x115

"Non-oil import prices rose at a 12.1 percent annual rate over the last quarter."

The June price data provided more evidence that inflation continues to inch upward driven, by higher oil and import prices. The overall CPI rose by 1.1 percent, while the core CPI increased 0.3. Over the last quarter, the overall CPI has risen at a 7.9 percent annual rate, up from a 5.0 percent rate over the last year. The core CPI has risen at a 2.5 percent rate for the quarter, almost identical to its 2.4 percent rate over the last year.

A 6.6 percent jump in energy prices was the big factor pushing inflation in June, although food prices rose by 0.8 percent. Food prices have risen at an 8.5 percent annual rate over the last quarter and a 5.3 percent rate over the last year.

Core inflation continues to be relatively well contained. Medical care costs are perhaps the biggest surprise, rising at just a 2.1 percent annual rate over the last quarter. However, new car prices have fallen at 0.1 percent annual rate over this period and apparel prices have risen at just a 1.0 percent annual rate, both numbers that seem inconsistent with the rise in wholesale and import prices.

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