Energy prices account for two thirds of CPI's 1% June Increase

The Consumer Price Index rose 1% in June as its energy component increased sharply for a second consecutive month, the US Department of Labor's Bureau of Labor Statistics reported July 16.

Jul 16th, 2008

Nick Snow
Washington Editor

WASHINGTON, DC, July 16 -- The Consumer Price Index rose 1% in June as its energy component increased sharply for a second consecutive month, the US Department of Labor's Bureau of Labor Statistics reported July 16.

The energy index's 6.6% increase on a seasonally adjusted basis in June accounted for about two thirds of the overall increase for all items during the month and followed a 4.4% increase in May, it said. "The index for petroleum-based energy advanced 10%, and the index for energy services rose 1.5%," BLS said. The energy index's 29.1% increase during 2008's first 6 months accounted for about half of the overall total growth as energy commodity prices climbed 34.7% and energy services prices rose 20.1%, it indicated.

The latest CPI report to Congress came one day after the Federal Reserve Board said steep increases in commodity prices boosted consumer price inflation in a sluggish US economy during the first half.

A decline in the dollar's foreign exchange value increased import prices, putting upward pressure on inflation, the Fed continued. "Near-term inflation expectations have risen considerably in recent months, and some indicators of longer-term inflation expectations have also moved up, a development that will require close monitoring in the period ahead."

Contact Nick Snow at nicks@pennwell.com

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