Food, Oil Prices Push Inflation to 17 Year High
The prices increases for food and oil have pushed inflation to its highest levels since 1991.
The cost of living in the US surged at twice the rate expected last month to the fastest annual level in 17 and a half years, official data showed today, due to spiralling food and oil prices.
The data adds to the gloomy economic news in the US coming from the slump in the housing market, falling growth and risk of a recession.
The Labour Department said that the consumer prices index of inflation, the key measure of inflation, rose at 0.8% in July, after a 1.1% jump in June. This was double Wall Street expectations.
Right now the big fear is that a shock will push commodity prices back up thus leading to more inflation and force the Federal Reserve to increase the interest rate to address the issue of inflation. This would be bad news for an already weak economy.