Core Inflation Increased at 11-year High in June

by Patrick Lunsford CollectionIndustry.com

Core U.S. consumer inflation reached an 11-year high in June as prices ? absent of energy and food costs ? moved up across the board.

Commerce Department said today in a sweeping release on prices, spending and incomes that the core personal consumption expenditure price index, an index of consumer prices that does not include energy and food prices ? moved up 0.2% in June. It was the third straight month that the index has increased 0.2%. Since June of last year, core consumer prices have moved up 2.4%, the largest year-over-year gain since April 1995.

Consumer prices including food and energy also rose 0.2% in June, and are up 3.5% in the past year, mostly driven by high oil prices.

Consumer spending increased 0.4% in June with personal incomes rising 0.6%. The savings rate in the U.S. did increase in June, but it is still in the red at a negative 1.5% savings rate. The U.S. savings rate has been negative for 15 straight months.

Economists worry that the new inflation numbers will keep pressure on the Federal Reserve to continue raising interest rates.