WASHINGTON (Reuters) - U.S. inflation hit a 17-year high last month, underscoring the pressure on Americans who face soaring gasoline and food costs while their job prospects dim and incomes shrink.A series of bleak reports on Thursday spotlighted the dilemma faced by Federal Reserve policy-makers who have little room left to lower interest rates to help a weak economy and are hoping for price relief to avoid the need to raise rates soon to tamp down inflation.
The Labor Department said its Consumer Price Index, the most commonly used inflation gauge, rose 0.8 percent in July and year-over-year jumped 5.6 percent, the strongest 12-month advance since January 1991 when the first Gulf War was under way.
Costlier energy and food helped push prices up at double the rate economists had expected last month, but since then oil prices have begun to decline. Some analysts said July might mark the worst of inflation pressures, but others noted the price gains hit a wide array of goods from clothing to airfares and cigarettes.
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