The U.S. Bureau of Labor Statistics said the energy index for Midwest consumers rose 5.9 percent over the month.
The report also said food prices rose by 0.3 percent in June after coming in unchanged in the two previous months.
The gains for the month matched the economists’ forecasts on Wall Street. Gasoline prices are down 23.3% over the a year ago; they hit bottom in January, then rebounded. At 8:30 a.m. ET, the yield on the benchmark 10-year Treasury rose from 2.34% to 2.37%, a 3 basis point move.
Consumer prices rose by 0.3% last month from May, the Labor Department reported Friday, putting them 0.1% higher than a year earlier.
The annual gain in core prices would have been cut in half if it weren’t for a 3% increase in the cost of shelter that is being driven by increasing rents. That year-over-year figure was severely depressed by the drop in gasoline costs. Over the past 12 months the main CPI has risen by an unadjusted 0.1%, the first time it’s shown a yearly increase since December. According to this viewpoint, higher wages will ultimately create more demand for goods, pushing prices higher and lifting inflation to the 2% level targeted by the Fed.
The pace of price increases, the report said, reflected in multiple divisions such as clothing and footwear, housing water, electricity, gas and other fuels, as well as other divisions.
Still, inflation remains quite subdued by historical standards.
She was also optimistic about the consumer-price trend. Crude oil touched a peak above $US100 a barrel about year ago before tumbling to below $US50 earlier this year. The case for a September rate rise remains finely balanced.
The acceleration in inflation in June was broad-based, with a steep increase in egg prices. “However, these downward pressures seem to be abating”. June’s CPI was slightly above market expectations of a 0.2% rise.
There were broad-based increases across the economy, including advances in gasoline, food and shelter.
The Consumer Price Index increased 0.3 percent in June. The decline reflected stronger inflation and flat average hourly earnings.