Record gas and higher food prices fueled inflation along the Wasatch Front, driving consumer prices up 1 percent in June from the previous month, according to a Wells Fargo & Co. report Wednesday.

"Gas prices are up 8 percent in June from May. Clearly, gas prices are an important thing to watch to see if the impact will spill over into other parts of the economy. Right now, most of the job losses in Utah are contained to the housing market. We're watching to see if job losses in the future are caused by high energy prices," said Kelly Matthews, executive vice president and senior economist with Wells Fargo.

"We need to see if gas prices become a bigger burden on consumers' budgets, causing them to cut back on vacations, driving. That's why it's so important for gas prices to stop going up and actually start dropping so we don't have secondary losses in the economy," he said.

And the drop in crude oil prices in recent days is a silver lining, Matthews said.

"Crude oil prices didn't break through $150 in the last three to four weeks, and for a second day in a row, crude tumbled down to the $130s range. If crude oil prices continue to edge lower, that will reduce the pace of acceleration in gas prices," he said.

Fueling the drop in crude prices is sharply reduced U.S. gasoline demand and an accompanying rise in U.S. gasoline inventories.

"Even with global demand still increasing, recent talk of oil drilling and expansion in the U.S. is spooking commodity traders. There's a good possibility that politicians are hearing that crude oil supplies need to be increased in the U.S., and if that message continues to be evident, traders will start to sell and push prices lower," he said.

"But we still need for the dollar to strengthen, and that probably won't happen until interest rates start to go up," Matthews said.

Locally, transportation costs, which account for nearly 20 percent of a typical Utahn's budget, skyrocketed 4.3 percent in June, driven by higher gasoline prices. On Wednesday, the price of a gallon of unleaded gasoline in Utah jumped 18 cents to $4.21 from a month ago and is up $1.14 from a year ago, according to AAA Utah.

Food costs, which account for nearly 9 percent of a typical Utahn's budget, jumped 1.3 percent in June. Prices of shelf items and produce rose, but prices of meat, poultry, fish and eggs dropped.

Housing costs, which account for nearly 36 percent of a typical Utahn's budget, edged up 0.6 percent in June, due mainly to an increase in rental rates. Medical care costs and education and communication costs remained stable in June, while clothing costs plunged 4.7 percent, driven by seasonal fluctuations in apparel prices.