News

US Consumer Prices Surge Amid Inflation Concerns

U.S. consumer prices jumped by one-point-one percent in June, the second largest increase in prices in 26 years. The surge is largely attributed to soaring energy prices, which rocketed upward by six percent. Federal Reserve Chairman Ben Bernanke expressed concerns about inflation and the overall economy during his second day of testimony on Capitol Hill.  VOA's Cindy Saine reports from Washington.

The bigger than anticipated rise in prices is cutting deeply into consumers' buying power, with average weekly wages, adjusted for inflation, falling by zero-point-nine percent.  The surge in energy costs is also trimming business spending and hurting economic growth.
 
Speaking to the House Financial Services Committee, Federal Reserve Chairman Ben Bernanke said inflation is a threat to hopes for an economic recovery.

"Inflation has remained high, running at nearly a three-and-a-half percent annual rate over the first five months of this year, as measured by the price index for personal consumption expenditures.  And, with gasoline and other consumer energy prices rising in recent weeks, inflation seems likely to move temporarily higher in the near term," he said.

Bernanke said consumers and businesses alike are likely to be cautious with their spending.  

A Commerce Department report shows that Americans cut back on purchasing cars, furniture and restaurant meals last month as the cost of gasoline soared.  Analysts say the current economic situation puts the central bank in a difficult position, because it may not dare to counter inflation by raising interest rates at a time when the U.S. economy remains weak, and global financial markets are under stress.

Asked at Wednesday's hearing if the U.S. economy is in a recession, Bernanke said that will be determined later by economists.  But he said there is no doubt that many Americans are facing tough times right now. "Whether it's a technical reception or not is not all that relevant.  It's clearly the case that for a variety of reasons families are facing hardships in terms of higher energy costs, declining wealth, all the things that you mentioned, so this is clearly a rough time," he said.

Despite the bleak forecast by Bernanke, U.S. stocks rallied late Wednesday.  The Dow Jones industrial average climbed about two percent as oil prices declined slightly and Wells Fargo Company issued upbeat quarterly results, easing concerns about the banking sector.


This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Iraqi Yazidis Fear Death of Their Communityi
X
Sharon Behn
August 03, 2015 2:23 PM
A year ago on August 3, Islamic State militants stormed the homelands of Iraq’s Yazidi minority, killing hundreds of men and enslaving thousands of women. The scenes of desperate Yazidi families crowding on the top of Sinjar mountain without food or water spurred Kurdish fighters into action, an emergency airlift and the start of the U.S. airstrike campaign against the Islamic State Sunni extremists. VOA's Sharon Benh reports from northern Iraq.
Video

Video Iraqi Yazidis Fear Death of Their Community

A year ago on August 3, Islamic State militants stormed the homelands of Iraq’s Yazidi minority, killing hundreds of men and enslaving thousands of women. The scenes of desperate Yazidi families crowding on the top of Sinjar mountain without food or water spurred Kurdish fighters into action, an emergency airlift and the start of the U.S. airstrike campaign against the Islamic State Sunni extremists. VOA's Sharon Benh reports from northern Iraq.
Video

Video Bangkok Warned It Soon Could Be Submerged

Italy's Venice and America's New Orleans are not the only cities gradually submerging. The nearly ten million residents of the Bangkok urban area now must confront warnings the city could become uninhabitable in a few decades. VOA Correspondent Steve Herman reports from the Thai capital.
Video

Video Inclusive Gym Gets People With Disabilities in Fitness Spirit

Individuals with special needs are 58 percent more likely to be obese than the general population. According to the U.S. Centers for Disease Control, they also have an increased likelihood of anxiety, depression and social isolation. But a sports club outside Washington wants to make a difference in these people's lives. With Carol Pearson narrating, VOA's June Soh reports.
Video

Video Astronauts Train Underwater for Deep Space Missions

Manned deep space missions are still a long way off, but space agencies are already testing procedures, equipment and human stamina for operations in extreme environment conditions. Small groups of astronauts take turns in spending days in an underwater lab, off Florida’s southern coast, simulating future missions to some remote world. VOA’s George Putic reports.
Video

Video Special Olympics Show Competitors' Skill, Determination

Special Olympics competitions will wrap up Saturday in Los Angeles, and the closing ceremony for athletes with intellectual disabilities will be held Sunday night. In a week of competition, athletes have shown what they can do through skill and determination. VOA's Mike O'Sullivan reports.
Video

Video Civil Rights Leaders Struggled to Achieve Voting Rights Act

Fifty years ago, lawmakers approved, and U.S. President Lyndon Johnson signed, the Voting Rights Act of 1965. The measure outlawed racial discrimination in voting, giving millions of blacks in many parts of the southern United States federal enforcement of the right to vote. Correspondent Chris Simkins introduces us to some civil rights leaders who were on the front lines in the struggle for voting rights.
Video

Video Shooter’s Grill: Serving Food with a Touch of the Second Amendment

Shooter's Grill, a restaurant in Rifle, Colorado, attracts visitors from all over the world as well as local patrons. The reason? Waitresses openly carry loaded firearms as they serve food, and customers are welcome to carry them, too. VOA's Enming Liu and Lin Yang paid a visit to Shooter's Grill, and heard different opinions about this unique establishment.
Video

Video Despite Controversy, Business Owner Continues Sale of Confederate Flags

At Cooter’s, a store in rural Sperryville, Virginia, about 120 kilometers west of Washington, D.C., Confederate flags are flying off the shelves. The red, white and blue battle flag, with 13 white stars representing the Confederate states, was carried by southern forces during the U.S. Civil War in the 1860s. The South had seceded from the Union over several key issues of disagreement, including slavery. VOA’s Deborah Block has the story.
Video

Video Booming London Property a ‘Haven for Dirty Money’

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Hometown of Boy Scouts of America Founder Reacts to Gay Leader Decision

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.

VOA Blogs