U.S. consumer prices rise, manufacturing slumps

WASHINGTON -- Consumer inflation rose in May, largely reflecting a big jump in gasoline and electricity costs. Manufacturing activity plunged for the eighth month in a row.

The Labor Department reported today that its Consumer Price Index, the government's most closely watched inflation gauge, climbed by a seasonally adjusted 0.4 percent last month, following a 0.3 percent increase in April.

The Federal Reserve said industrial output at the nation's factories, mines and utilities fell by 0.8 percent in May, a drop double what analysts were predicting and the worst showing since January.

Operating capacity plummeted to 77.4 percent in May, the lowest level since August 1983.

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