Stag-Flation?

The number of U.S. homeowners swept up in the housing crisis rose further last month, with foreclosures up nearly 50% compared with a year earlier, a foreclosure listing company said Friday. Nationwide, 261,255 homes received at least one foreclosure-related filing in May, up 48% from 176,137 in the same month last year and up 7% from April, RealtyTrac Inc. said. One in every 483 U.S. households received a foreclosure filing in May, the highest number since RealtyTrac started the report in 2005 and the second-straight monthly record. The housing crisis grew worse in May, as more than 73,000 American families lost their homes to bank repossessions, up a staggering 158% from the 28,548 households that were dispossessed in May 2007.

The consumer price index, the government's main gauge of inflation, soared 0.6% after seasonal adjustments, its biggest jump in six months, as gasoline costs surged 5.7%, the Labor Department reported Friday. Overall consumer prices rose a larger-than-expected 4.2% over the past 12 months. The combination of rising inflation and weak wage gains contributed to another drop in weekly earnings. After adjusting for inflation, weekly earnings for non.-supervisory workers were down 1.2% in May. Some economists now expect the Fed to start raising interest rates to slow the economy and put a lid on inflation.

• JJ Commentary: Slowing an already slow economy is a risky move.