Prices in the United States rose by 5.6% in the year to July - the fastest inflation rate for more than 17 years.
The rate of inflation was much greater than predicted, driven higher by the 30% increase in energy prices during the period.
Food costs were 6% higher than a year earlier, the figures showed. Price rises are squeezing consumers further. Inflation-adjusted average weekly earnings fell by 3.1% in July compared with a year earlier.
Despite the high inflation figure, economists predict the rate will begin to slow from next month as a result of recent falls in the oil price. Oil reached a record high of $US147.27 a barrel on 11 July, but has fallen significantly since.
