Reply #2: US inflation quickest in 17 years / BBC [View All]

[Demeter]

US inflation accelerated at its fastest pace in 17 years in June, official figures have shown, driven higher by surging energy prices. Consumer prices were 5% higher than a year ago and rose 1.1% on a monthly basis, the Labor Department said... June's annual inflation increase was the highest since 1991 while the monthly jump is the sharpest since September 2005.

Federal Reserve boss Ben Bernanke has warned that the threat of rising inflation has intensified recently. Minutes from the Fed's latest meeting on interest rates indicated the next move in borrowing costs could be up. It faces the dilemma of having to stem the rise in inflation while not further choking an economy under serious strain...In his second day of congressional testimony on Wednesday, the Fed boss said inflation was too high and it was a key objective for the central bank to bring it down.

Many analysts now believe that the central bank may have to leave borrowing costs on hold, or even increase them, as it tries to steer a faltering economy through turbulent times. This increases concern that the Fed is not going to be able to lower interest rates if the economy remains weak...Energy prices were the main driver of price growth, and were 6.6% higher in June as the cost of petrol, natural gas and heating oil increased...Average weekly wages, after adjusting for inflation, fell by 0.9% in June - the biggest monthly decline in 24 years, the Department said.


Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7509729.stm