US consumer prices up 0.6%

The sharp increase in both petrol and energy prices have caused US consumer prices to increase in May at their fastest pace for over six months. The 0.6 percent rise was 0.1 higher than analysts had expected especially after the 0.2 percent rise from the month before.

During the month it was the change in energy prices that caused the biggest shock as prices surged 4.4 percent which is the biggest increase since November and this was all underwritten by the continual rise in the price of oil, up 5.7 percent since November.

Prices were up by 4.2 percent compared to May last year, whilst the core rate increased 2.3 percent from May 2007.

Crude oil reached a record $139.12 a barrel on the New York Mercantile Exchange last week, and the Americans have now also been hit at the pumps with the $4 a gallon this week.

Furthermore the oil prices are also affecting prices across the board as airlines are adding fees and increasing fares in order to stay in business as a result of the fact that fuel prices have soared to twice their 2007 prices.

UAL Corp.’s United Airlines have announced that they will start charging customers $15 each way for a single checked bag on domestic flights which will also be followed by other US airlines, in order to cover their fuel costs.

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