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Gas fuels rising cost of consumer goods in June

When it comes to high inflation, fuel prices are the root of all evil. Consumer prices rose in June by 1.1 percent, the second-largest month-to-month gain in a quarter century. A 6.6 percent jump in energy costs was the main culprit. Energy's impact can be direct, such as the price you pay at the gas pump, or indirect like food price increases as farmers divert crops into ethanol fuel production.

Eating healthy got a lot more expensive in June. The price of fresh vegetables, brought to market on the backs of diesel guzzling trucks, soared 6.1 percent. Milk, meat and eggs were slammed by rising feed prices.

Despite a dip in smoking's popularity, tobacco products got 1.5 percent more expensive. Airline fuel costs translated into a 4.5 percent jump in ticket prices, the worst hit to flying affordability in eight years.

Some consumer products escaped the pain. Electricity prices dropped a bit, clothing grew cheaper and cereals and baked goods rose a modest 0.5 percent.

But for St. Petersburg resident Scott Lamer, there's little to do to escape pummelling at the pump and gouging in the grocery aisle. "How much can you change?" said Lamer, a certified public accountant who fills his Infiniti with premium gasoline. "You need food, and I didn't buy that many steaks to begin with."

Other economic highlights Wednesday

• The Dow Jones industrial average posted its best daily gain since April, rising 276 points, or 2.5 percent. The biggest reason: a $4.14 drop in oil to $134.60 a barrel.

• Fed chairman Ben Bernanke said Fannie Mae and Freddie Mac are in "no danger of failing."

• Worried about rising inflation, Federal Reserve officials at their meeting in June thought the Fed's next move on interest rates was likely to be up, newly released documents said.

Gas fuels rising cost of consumer goods in June 07/16/08 [Last modified: Thursday, July 17, 2008 11:54am]
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