Consumer prices rose faster than most workers' wages last year, as surging energy prices pushed inflation up to the highest level in four years, the Labor Department said today.
Americans paid 26.1 percent more for gasoline last month than they did a year earlier, as well as higher prices for food, housing, medical care, college tuition, recreation and a variety of other goods and services.
After all those price increases, the department's consumer price index (or CPI), one of the most widely followed measures of inflation, was 3.3 percent higher in December than a year before. That rate of inflation was much faster than the 1.9 percent rate of 2003, and the highest since the 3.4 percent rate of 2000.
Workers' pay also rose last year -- but more slowly than prices. After adjusting for inflation, average hourly wages for production and nonsupervisory workers fell 0.8 percent -- the first such decline since 1994, Labor figures show.
"Thus, any real income growth these families achieved last year was a function of more work at lower hourly wages," wrote Jared Bernstein, senior economist at the Economic Policy Institute, in an analysis of the data. "The recovery is no longer jobless, but the benefits of the growing economy are still failing to reach many working families."
Many economists believe inflation, along with world oil prices, peaked last year and will ease somewhat this year.
Oil prices have already fallen to around $48 a barrel recently from a record above $55 a barrel in October. Gasoline prices have dropped to a current national average of $1.82 for a gallon of regular from a high of $2.05 in May, according to the AAA auto club.
The CPI swung up and down on a monthly basis last year, as energy prices fluctuated. It slid 0.1 percent in December, as energy prices dropped 1.8 percent.
Several economists expect slower inflation this year, in large part because they forecast lower, or at least more stable, oil prices. The jump in prices last year was fueled primarily by rising global demand at a time of limited supplies.
Traders bid prices higher as terrorist attacks, hurricanes and political turmoil in oil-producing countries disrupted, or even threatened to disrupt, supplies.
