· For June and July together, prices rose at an 11.8% annual rate. Except for a short-lived spike in mid-2005 that was the fastest rate of increase since 1982.

· Energy prices jumped another 4.0% in July after increases of 6.6% and 4.4% during the prior two months.  Fuel oil prices continued strong and posted a 1.3% (61.1% y/y) increase while natural gas & electricity prices jumped 4.0% (15.0% y/y).

· Gasoline prices jumped a seasonally adjusted 4.1% in July and they were up 37.9% y/y. Not seasonally adjusted gasoline prices, however, rose just 0.7% m/m last month and they are down 5.2% m/m on average so far in August.

· Food & beverage prices continued strong. A 0.9% July increase lifted the y/y gain to 5.8% and that was the fastest since 1990. Prices for cereals & bakery products rose at a 17.0% rate during the last three months while dairy and related products increased at a 13.2% rate. Prices for meats poultry & fish showed increased upward pressure and they rose at an 8.1% rate while dairy product prices surged at an 13.2% rate during the last three months.

· Less food & energy consumer prices beat expectations, slightly, with a 0.3% increase which matched the June rise. During the last three months the increase in core prices accelerated to a 3.5% annual rate which was the quickest since mid-2006.

· Core goods prices jumped 0.5%, the fastest m/m increase since 1999. On a three-month basis prices rose at an accelerated 1.7% rate, the fastest since late 2004. Higher apparel prices led the recent strength with a 1.2% (0.7% y/y) increase. Prices for household furnishings & operations also were firm and they rose 0.4% (0.8% y/y). Prices for new & used motor vehicles nudged up 0.2% but they were down 0.3% year-to-year. In July, tobacco prices jumped 1.2% (7.7% y/y).

· Core services prices again were firm and they rose 0.3%. That lifted the three-month growth rate to 4.1%, the fastest in two years. Public transportation prices remained strong. They posted a 1.1% July increase (14.5% y/y), rising at a 31.2% annual rate during the last three months. Medical care services prices rose a reduced 0.2% (4.1% y/y) and shelter prices also rose just 0.2% (2.5% y/y) in July. That was the weakest y/y gain since early 2006. Owners equivalent rent of primary residence, a measure not equivalent to other house price measures, nudged up 0.1% (2.6% y/y) and rents rose 0.3% (3.7% y/y). Education costs rose another 0.5% (5.7% y/y) after a 2.4% rise during all of 2007.

· The chained CPI, which adjusts for shifts in consumption patterns, rose 0.4%. Less food and beverages chained prices rose 0.2%.

Consumer Price Index (%)

Y/Y 

2006

2005

Total 

5.6

3.2

3.4

Total less Food & Energy

2.5

2.5

2.2

  Goods less Food & Energy

0.6

0.2

0.5

    Services less Energy

3.3

3.4

2.8

  Energy

29.3

11.0

17.0

  Food & Beverages

5.8

2.3

2.5

Chained CPI: Total (NSA) 

4.8

2.9

2.9

 Total less Food & Energy 

2.2

2.2

1.9