Reported consumer inflation continued to surge on both a monthly and annual basis, once again topping consensus expectations. The July CPI-U jumped to a 17-year high of 5.6% in July, while annual inflation for the narrower CPI-W — targeted at the wage-earners category where gasoline takes a bigger proportionate bite out of spending — annual inflation jumped to 6.2%. The CPI-W is used for making the annual cost of living adjustments to Social Security payments. The 2009 adjustment — based on the July to September 2008 period — remains a good bet to top 5%, more than double last year’s 2.3% adjustment for 2008.  Such is not good news for federal budget deficit projections.

CPI-U.  The Bureau of Labor Statistics (BLS) reported that the seasonally-adjusted July CPI-U gained 0.82% (0.53% unadjusted) +/- 0.12% for the month, versus the 1.06% (1.01% unadjusted) gain in June.  Year-to-year or annual inflation in July jumped to 5.60% from 5.02% in June.  Annual inflation will continue its upturn in August 2008 reporting, dependent on the seasonally-adjusted monthly gain exceeding the negligible 0.02% monthly increase seen in August 2007, which appears highly likely.  The difference would directly add to or subtract from July’s annual inflation rate of 5.60%.

The adjusted monthly inflation continued to reflect some catch-up from the underreporting of energy-related inflation in recent months. The continued lack of significant pick-up in the gimmicked concept of "core" inflation remains beyond belief.

C-CPI-U. Annual inflation for the Chain Weighted CPI-U — the fully substitution-based series that increasingly gets touted by CPI opponents and inflation apologists as the replacement for the CPI-U — rose to 4.76% in July from 4.24% in June.

Alternate Consumer Inflation Measures. Adjusted to pre-Clinton (1990) methodology, annual CPI growth rose to roughly 8.6% in July from 8.3% in June, while the SGS-Alternate Consumer Inflation Measure, which reverses gimmicked changes to official CPI reporting methodologies back to 1980, rose to a 28-year high of roughly 13.4% in July, up from 12.6% in June.  The alternate numbers are not adjusted for any near-term manipulations of the data. The SGS-alternate data tab will be updated later today a www.shadowstats.com.