Partly reflecting a substantial rebound in gasoline prices, the Labor Department released a report on Tuesday showing U.S. consumer prices increased by slightly more than expected in June following three straight monthly declines.
The Labor Department said its consumer price index climbed by 0.6 percent in June after edging down by 0.1 percent in May. Economists had expected consumer prices to rise by 0.5 percent.
The bigger than expected increase in consumer prices reflected the strongest price growth since August of 2012.
Over half of the monthly increase in consumer prices was due to the rebound in gasoline prices, which soared by 12.3 percent in June after plunging by 3.5 percent in May.
The jump in gas prices also contributed to a 5.1 percent spike in energy prices following four consecutive monthly decreases.
The report said food prices also rose by 0.6 percent in June after climbing by 0.7 percent in May, as prices for food at home continued to rise.
Excluding the higher prices for food and energy, the core consumer price index ticked up by 0.2 percent in June after slipping by 0.1 percent in May. Core prices were expected to inch up by 0.1 percent.
The Labor Department said the uptick in core prices came as prices for motor vehicle insurance increased sharply in June after recent declines.
Prices for apparel, shelter, and medical care also rose in June, while prices for used cars and trucks, recreation, and communication all fell.
Compared to the same month a year ago, consumer prices increased by 0.6 percent in June compared to the 0.1 percent uptick in May. The annual rate of growth in core prices was unchanged at 1.2 percent.
“The June consumer price data suggest the outright deflationary impulse following the nation-wide lockdowns has subsided,” said a note from economists at Oxford Economics.
They added, “That said, the slow recovery in aggregate demand will keep the pace of inflation very subdued in the coming months.”
Last Friday, the Labor Department released a separate report showing producer prices unexpectedly decreased in the month of June.
The Labor Department said the producer price index for final demand fell by 0.2 percent in June following a 0.4 percent increase in May. Economists had expected prices to climb by another 0.4 percent.
Excluding food and energy prices, core producer prices inched up by 0.1 percent in June after rising by 0.3 percent in May. Core prices were also expected to increase by 0.4 percent.
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