The Labor Department’s Consumer Price Index rose .8% in July on a seasonally adjusted basis, double what was expected. This figure helped raise consumer prices from July of 2007 through July of 2008 by a total of 5.6%.
This is the biggest increase in 17 years.
Other good news announced today:
New claims for jobless benefits were higher than anticipated at 450,000 and wages have decreased. From a story by Shobhana Chandra on Bloomberg:
Today’s figures also showed wages decreased 0.8 percent after adjusting for inflation following a 0.9 percent drop in June. They were down 3.1 percent over the last 12 months, the biggest year-over-year decline since 1990. The drop in buying power is one reason economists forecast consumer spending will slow.
And so it continues: higher prices, lower wages, rising unemployment. Anyone who tells you this is over soon is a liar or a fool.
Update (8/19/08): Here’s Brian Wesbury in the Wall Street Journal on the dangers of inflation.