Bloomberg (and a million other news outlets) reports:
U.S. consumer prices surged 5 percent in the past year, the biggest jump since 1991, just as households struggled with falling home values and the credit crunch. Spiraling expenses for food and fuel spurred the increase in June, the Labor Department said today in Washington. The cost of living rose 1.1 percent from May, more than forecast and the second-largest rise since 1982.
Yikes.
Not news to anybody who watches their spending. The official inflation rate has been manipulated down for some time, but they don’t want to lose all credibility, so they have let it go up some. If you look at what you are actually paying for a whole lot of things today vs. a year ago, I bet it’s more than a 5% increase, and those that have not gone up that much are, for the most part, things you can do without. Food, gas, utilities (and don’t forget taxes) you just have to grit your teeth and pay.
Food and Fuel are not factored into the CPI… their increase rates are far greater than 5%
Actually, the 5% includes food and energy. The reported core rate was 2.4%.
Correction… in some assessments of the CPI food and fuel are excluded or sometimes considered underweighted.
The thought is that if the relatively volatile food and energy components are stripped, broader trends are more apparent.