U.S. Consumer Prices Rise Twice as Much as Estimated on Energy, Food Costs

[marmar]

U.S. July Consumer Prices Rise More Than Forecast on Fuel, Food

By Shobhana Chandra

Aug. 14 (Bloomberg) -- U.S. consumer prices rose more than forecast in July, indicating Federal Reserve policy makers have reason to be concerned over a pickup in inflation.

The consumer price index climbed 0.8 percent, twice as much as anticipated, the Labor Department said today in Washington. The cost of living was up 5.6 percent in the year ended in July, the biggest jump in 17 years. So-called core prices, which exclude food and energy, also rose more than projected.

The report may intensify the debate between those Fed policy makers that forecast inflation will slow and those concerned that price pressures will accelerate. Increases beyond food and fuel, including gains in clothing, airline fares and education, make it less likely that central bankers will be able to keep interest rates unchanged for long.

``We're seeing persistent price pressures,'' Julia Coronado, senior economist at Barclays Capital Inc. in New York, said before the report. ``This has been with us for so long there's a risk it's worked its way into the minds of consumers and businesses. It limits the Fed's sensibility to cut rates further.''

Consumer prices were forecast to rise 0.4 percent, according to the median forecast of 78 economists in a Bloomberg News survey. Estimates ranged from gains of 0.1 percent to 0.7 percent.

Costs excluding food and energy increased 0.3 percent for a second month, exceeding the 0.2 percent median forecast of economists surveyed.

The core rate increased 2.5 percent from July 2007, the most since January, after a 2.4 percent year-over-year increase the prior month.

Unemployment Claims

Separately, Labor reported that more Americans than anticipated filed first-time claims for jobless benefits last week.

Energy expenses jumped 4 percent, after a 6.6 percent gain in the prior month, today's report said. Gasoline prices increased 4.1 percent. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=amisOhrnjyh4&refer=home

[NMDemDist2]

1. no chit

i used to be able to feed the two of us for about $60 a week at the grocery store, now it's double that for the same stuff.

thankfully the butcher shop hasn't gone up the same way....

[LiberalEsto]

2. Rethug feeding frenzy

They're trying to squeeze every last penny out of us before the handover on Jan. 20, 2009.

[paparush]

3. In related news: Drop in 2008's oil consumption was the biggest drop in 26 years.

The fall in US oil consumption in the first half of 2008, reflecting slower economic growth and the impact of high prices, was the largest half-year consumption decline in volume terms in the last 26 years, when, in the first half of 1982, consumption dropped by nearly 800,000 barrels per day (bbl/d).

The Energy Information Administration (EIA) of the US Department of Energy, said on Tuesday in its Short Term Energy Outlook, that prospects for improved oil market fundamentals over the next 18 months point to an easing in the market balance and price weakness over the near term. The combination of slower US and global oil consumption growth, increased production capacity for crude oil and natural gas liquids in the Organization of the Petroleum Exporting Countries (OPEC) beginning in the third quarter 2008 and continuing through 2009, and higher non-OPEC supply, raises the prospect for a drop in demand for OPEC crude oil and an increase in surplus capacity. Downward price pressures would increase if the economic slowdown proves deeper or longer than expected, and if higher prices lead to lower consumption and lower demand for OPEC crude than currently anticipated.

Also on Tuesday, the Paris-based International Energy Agency (IEA) - the energy adviser to 27 developed countries including Ireland - said that the fundamentals of the oil market are easing thanks to a combination of slower demand growth and record production from OPEC.

http://www.finfacts.ie/irishfinancenews/article_1014443.shtml

[dweller]

4. price increases overboard

i'm single, so my bill is fairly low.

but in 2 weeks since last shopping, i've noticed huge increases, for example: $1/lb increase in cheese?
That's too much.

doesn't appear to affect all dairy items, or just not as much.
dp