U.S., euro-zone inflation rates hit multi-year highs in June
Inflation in the United States and the European countries that share the euro hit multi-year highs in June, driven up by booming energy prices.
The U.S. government said Wednesday that the inflation rate last month hit the second-highest rate in 26 years, reaching 1.1 per cent for the month. That trailed only the 1.3 per cent increase seen in September 2005 following Hurricane Katrina.
Energy prices rose in June by 6.6 per cent and accounted for two-thirds of the overall increase for the month as consumers paid more for gasoline, natural gas and home heating oil.
The year-over-year change in prices was five per cent in June, matching the one-year increase seen in May 1991.
Food prices in the U.S. were up 0.7 per cent in June as vegetable prices shot up 6.1 per cent.
The one-month core rate of inflation, which factors out energy and food, was up 0.3 per cent in June.
"While energy prices continue to pressure the overall inflation rate ever higher, there is only limited evidence to date that this is feeding through into core inflation," said Paul Ferley, assistant chief economist at RBC economics research
"However, the [Federal Reserve] will likely remain wary about these rising headline figures starting to affect inflationary expectations," Ferley said.
Meanwhile, Eurostat, the statistical bureau of the European Union, said annual inflation in the 15 countries using the euro reached four per cent in June, the biggest growth in 16 years of record keeping. Higher prices for energy, food and housing were responsible for the increase.
The rates of inflation varied from 6.8 per cent in Slovenia to a low of 2.3 per cent in the Netherlands.
Canada's June inflation report is to be released on July 23.
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