U.S. Consumer Price Rise in June, Driven by Gasoline

ecPulse
2014-07-22 12:43PM UTC

U.S. consumer prices rose in June but at a slower pace, boosted by the biggest jump in gasoline prices in a year, the latest indicator of firming inflationary pressures across the U.S. economy.

The consumer price index increased 0.3 percent after a 0.4 percent gain the prior month, matching estimates by Bloomberg, figures from the Labor Department showed today in Washington.

The core measure, which excludes volatile food and fuel costs, increased 0.1 percent, less than projected.

The index was up 2.1% in June from a year earlier, unchanged from May`s annual rise. The index excluding food and energy rose 1.9% in June from a year earlier, slipping from May`s 2% annual increase.

Gasoline costs jumped 3.3 percent, the biggest gain since June 2013, accounting for two-thirds of the increase in total prices, today’s report showed.

The Federal Reserve has set an annual inflation goal of 2%. But it prefers to look at a different gauge, the Commerce Department`s personal consumption expenditures price index, which typically runs below the CPI`s level. In May, the PCE price index was up 1.8% from a year earlier and rose 1.5% excluding food and energy.

By that measurement, inflation has undershot the central bank`s target for more than two years. But both closely watched gauges have risen in recent months as the labor market has gained strength, fueling a debate inside and outside the Fed over the future course of interest rates.

Fed Chairwoman Janet Yellen last week said that "a high degree of monetary policy accommodation remains appropriate" and that "although the economy continues to improve, the recovery isn`t yet complete."

The Fed has kept short-term rates pinned near zero since December 2008 to bolster the U.S. economy through a financial crisis, a recession and five years of sluggish recovery. The central bank is winding down its bond-buying program, which is on track to end in October, and most policy makers expect to begin raising rates sometime next year, in part to help keep inflation in check.

American Markets News

Americas News

Markets

Dow Jones rises ahead of US inflation data
2024-03-27 15:35PM UTC
Most US stock indices rose on Wednesday ahead of new important US data on growth and personal ...
Americas News

Markets

Wall Street gains ground following positive data
2024-03-26 15:41PM UTC
US stock indices rose on Tuesday after a series of losses as markets assess latest ...
Americas News

Markets

Wall Street loses ground as the week opens up
2024-03-25 16:16PM UTC
Most US stock indices declined on Monday as markets assess the Federal Reserve’s stance on ...