WASHINGTON — Inflation is running at the fastest pace in 17 years, the job market is under further strain, and foreclosure filings are surging.
A raft of gloomy economic data Thursday represented a setback for those hoping to see signs of better times ahead, and it may keep the Federal Reserve jammed between rising inflation and slowing growth.
The Labor Department reported that consumer prices shot up by 0.8 percent in July, double the increase that economists had expected. The big gains left inflation increasing by 5.6 percent over the past year, the largest 12-month jump since the period ending in January 1991.
Core inflation, which excludes volatile food and energy costs, rose 0.3 percent in July, slightly higher than the 0.2 percent increase that economists had expected.
For the past 12 months, core inflation has risen by 2.5 percent, the highest 12-month change since February.
The Denver-Boulder-Greeley consumer price index, also released Thursday, rose 3.7 percent in the first half of 2008 from the first half of 2007.
Energy prices rose 19 percent, including a 24.6 percent increase in gasoline prices, while food prices were up 4.1 percent in the first half of the year.
Subtracting energy and food, core inflation in the metro area was running at a 2.2 percent pace in the first half.
Both inflation reports showed that price gains spread to other areas beyond food and energy. Clothing costs jumped by the largest amount in a decade, airline fares rose sharply, and the cost of hotel rooms and tobacco products also climbed.
“For the average American, these inflation numbers are very bad news. It means that their purchasing power has been cut and their wages aren’t going very far,” said Mark Zandi, chief economist at Moody’s .
Indeed, the Labor Department said in a separate report that average weekly wages, after adjusting for inflation, fell by 3.1 percent in July compared with a year ago, the biggest year-over-year decline since November 1990.
