by Calculated Risk on 8/14/2008 08:57:00 AM

From MarketWatch: Consumer prices jump 0.8% in July

U.S. consumer prices jumped a greater-than-expected 0.8% in July, marked by big increases in energy, food, clothing and cigarettes, the Labor Department reported Thursday.

The core consumer price index - which excludes volatile food and energy prices - rose 0.3% for the second straight month.
...
Consumer prices are up 5.6% in the past year, the biggest year-over-year increase since January 1991. The CPI has surged at a 10.6% annualized rate in the past three months.

Click on graph for larger image in new window.

This graph shows the year-over-year change in inflation, both CPI and Core inflation (less food and energy). Using CPI, inflation is at the highest level in 17 years.

Also note that CPI has persistently been running ahead of Core for most of the last 5+ years. This is mostly due to the huge increase in energy prices (and food too).

The good news is inflation should slow as energy prices fall (if they continue to decline). And inflation helps with real house prices too!