U.S. inflation hit 3.4 percent in 2005

WASHINGTON, Jan. 19 (UPI) -- Inflation in the United States hit a five-year high in 2005, largely the result of near-record energy prices.

The Labor Department said overall U.S. inflation last year was 3.4 percent, its sharpest increase since 2000 and more than the increase in workers' average wage gains, The Washington Post reported Thursday.

Average hourly wages fell 0.5 percent and average weekly earnings declined 0.4 percent, after adjusting for inflation, in the 12 months that ended in December.

The department also said that last year was the third consecutive year in which weekly wages fell, after adjusting for price changes, according to department statistics on the 92 million private production and non-managerial service workers who make up more than 80 percent of the nation's workforce.

"We're just not seeing the improvement in living standards you'd expect" in an economy that is expanding at a healthy pace and benefiting from rapid productivity growth, said Jared Bernstein of the labor union-oriented Economic Policy Institute.

Although last year's overall inflation rate was 3.4 percent, the nation's core inflation rate, which excludes volatile food and energy costs, was 2.2 percent last year.