WASHINGTON — July's consumer prices were 5.6% higher than a year ago, the largest rise in 17 years, the Labor Department reported today.
The consumer price index increased .08% from June to July, fueled by rising food, gasoline, and airfare prices. In June, the CPI increased 1.1%.
July's CPI, minus food and energy, was .3%.
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The CPI rose at the following rates in these categories: .9% for food and beverages; .6% for housing; 1.2 for apparel; 1.7% for transportation; and .1% for medical care.
The higher prices were yet another indication that the economy is still underperforming with few signs of an improvement in the short term. Many economists have said they don't expect a significant turnaround to start until the first half of 2009.
Former Federal Reserve Chairman Alan Greenspan told The Wall Street Journal that he predicts housing prices "are likely to start to stabilize or touch bottom sometime in the first half of 2009," though he hedged his prediction by adding that ""prices could continue to drift lower through 2009 and beyond."
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