Gas prices blamed for June prices hike
Tuesday, July 16, 2013
WASHINGTON (AP) — Higher gasoline costs pushed a measure of U.S. consumer prices up in June. But the overall trend in inflation stayed tame.
The Labor Department said Tuesday that the consumer price index increased 0.5 percent in June from May. Two-thirds of the increase came from a 6.3 percent jump in gas prices, the largest since February.
Excluding volatile food and energy costs, so-called core prices rose just 0.2 percent.
Consumer prices have been stable this year, allowing the Federal Reserve room to continue efforts to stimulate the economy.
Overall prices have risen just 1.8 percent over the past 12 months. And core prices are up just 1.6 percent in that period — the smallest 12-month change in two years.
Both measures are below the Fed’s 2 percent inflation target.
Slow economic growth and high unemployment have kept wages from rising quickly. That has made it harder for retailers and other firms to raise prices.
Tame inflation has helped consumer increase spending this year despite slow income growth and higher Social Security taxes.
In June, prices for all energy products rose 3.4 percent mostly because of the surge in gasoline costs. Beyond that, other prices were little changed.
The gas price surge was driven by a jump in global oil prices, which reflected in part the political turmoil in Egypt. Chris G. Christopher Jr., director of consumer economics at Global Insight, said pump prices are likely to fall once conditions stabilize in Egypt.
Food prices ticked up 0.2 percent. New cars prices increased 0.3 percent but are up just 1.3 percent over the past year. Clothing prices rose 0.9 percent in June but are up just 0.8 percent over the past 12 months. Prices for used cars fell 0.4 percent and are down 2.3 percent over the past year.
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