CSBJ Daily

The Associated Press

WASHINGTON – Consumer prices shot up during June at the second fastest pace in 26 years with two-thirds of the surge blamed on soaring energy prices.

The Labor Department reported that consumer prices jumped 1.1 percent last month, much worse than had been expected. Energy prices rocketed upward by 6.6 percent, reflecting big gains for gasoline, home heating oil and natural gas.

The big rise in prices cut deeply into consumers’ earning power with average weekly wages, after adjusting for inflation, falling by 0.9 percent.

It was the biggest monthly decline since a 1.1 percent drop in weekly wages during September 2005.

The 1.1 percent June price increase was the second largest monthly advance in the past 26 years, surpassed only by a 1.3 percent gain during September 2005 from a jolt to energy costs after Hurricane Katrina.

Separately, the Federal Reserve reported that industrial output rose 0.5 percent during June, the fastest pace in 11 months. The increase, the highest since a 0.6 percent gain during July of last year, reflected an end to an automotive production strike rather than any widespread strength in the economy.

The report on retail inflation followed similarly grim news on Tuesday that wholesale prices had shot up by 1.8 percent during June.