Economy Shows Signs of Strain From Oil Prices

Inflation surged last month, the government reported yesterday, as the long rise in energy prices finally seemed to be pinching the American economy. After absorbing the burden of oil at $40 a barrel, then at $50 and beyond, consumers have started to react as prices have risen above $60 in recent weeks.

Wal-Mart blamed high oil prices yesterday as it reported that in the recent quarter its profits rose at their slowest rate in four years. The chief executive, H. Lee Scott Jr., told investors that expensive oil was worrying him because it seemed to be erasing recent income gains for many customers.

Airlines have already felt the sting of increasing jet fuel costs. Last week, Delta, United and Continental raised domestic fares in their latest attempt to stem losses; Delta is struggling to avoid bankruptcy. United Parcel Service recently reminded its drivers not to leave truck engines running while they deliver packages.

Nearly all of the jump in inflation last month came from energy.

New York Times