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Inflation index rises almost 7% amid economic concerns over possible recession

The higher cost of energy has been the primary driver of inflation over the past year and continues to push up consumer prices. File Photo by Phil McCarten/UPI | <a href="/News_Photos/lp/5d59b9ca28cfd3dddd2ca8c8526b8bd4/" target="_blank">License Photo</a>
The higher cost of energy has been the primary driver of inflation over the past year and continues to push up consumer prices. File Photo by Phil McCarten/UPI | License Photo

July 29 (UPI) -- A key government inflation gauge showed on Friday that prices have risen by close to 7% over the past year -- another figure that's stoking fears of an impending recession and fueling rising economic discontent among the American public.

The personal consumption expenditures price index was up 6.8% over the 12 months ending in June, the largest year-to-year increase since 1982.

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On a month-to-month basis, the inflation index was up 1% -- which is the largest monthly increase since 2005.

The figures punctuate ongoing frustration in the United States over hot-running inflation that's run over the economy in the past year and the dwindling value of the dollar.

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"Food prices increased 11.2% and energy prices increased 43.5%," the index said. "Excluding food and energy, the PCE price index increased 4.8% from one year ago."

Rising inflation has been fueled by abnormally high energy prices, such as gasoline and natural gas. Gas prices in the United States reached a record high in June, but have steadily fallen over the past month.

According to AAA, the national average on Friday was $4.25, a decrease of about 3 cents from the previous day.

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Politically, the higher prices are almost certainly the most serious threat to Democrats in Congress and Democratic governors nationwide. The party will attempt to keep control of both chambers of Congress in November.

Friday's index came a day after the Commerce Department said in its monthly update that the U.S. economy declined by 0.9% in the second quarter. It was the second consecutive quarterly loss and did nothing to alleviate concerns about a possible recession.

President Joe Biden acknowledged the economic slowdown on Thursday, but insisted that the economy is on the right track.

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