Consumer Price Index Rises 5 Percent, Most Since 1991

Record gas and higher food prices took the government's key inflation measure to the biggest annual jump since 1991, fanning fears that inflation pressures were much worse than expected.

The Labor Department reading is also another sign, along with mounting job losses and declining home prices, of the economic pain being felt by Americans as prices outstrip increases in paychecks. The latest reading comes as Federal Reserve Chairman Ben Bernanke is warning that inflation could be a major drag on the economy the rest of this year.

Prices paid at the retail level were up 5% on an annual basis in June, the biggest 12-month change since May 1991 - an annual figure that was skewed by the surge in gasoline prices related to the first Gulf War.