June Inflation double that of May, 2008 energy index up 29%!
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According to the Department of Labor Consumer Price Index (CPI) numbers for June, prices increased 1.1 percent for the month of June compared with 0.6 percent for May - almost double. The index for energy rose sharply for the second straight month, increasing 6.6 percent in June following a 4.4 percent increase in May. The increase in the energy index accounted for around two-thirds of the overall increase in the all items index in June and has increased 29.1% for 2008 on a seasonally adjusted basis
Core inflation, the increase in index less food and energy, was 0.3% for June. Consumer prices advanced at a seasonally adjusted annualized rate (SAAR) of 7.9 percent in the second quarter after increasing at a 3.1 percent rate in the first three months of 2008. This brings the year-to-date annual rate to 5.5 percent and compares with an increase of 4.1 percent in all of 2007.
The index for gasoline rose 10.1 percent, accounting for slightly more than half of the total advance in the all items index, and was 32.8 percent higher than in June 2007. According to the EIA, The average price of Gasoline for US consumers went down from $4.114 a gallon to $4.113 a gallon, a very marginal decrease. Gas prices are at record highs and average price of gasoline in the US is up 34.89% from June of 2007!
The FMOC, Federal Open Market Committee, met today and voted to keep the federal funds rate at the current rate of 2%. The Committee expects inflation to moderate later this year and next year but expressed concerns over recent inflationary activity of energy and certain commodities.
In light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high.
