Consumer prices in the U.S. edged slightly higher in the month of June, the Labor Department revealed a closely watched report released on Thursday.
The Labor Department said its consumer price index inched up by 0.1 percent in June after rising by 0.2 percent in May. Economists had expected consumer prices to increase by 0.2 percent.
The report said energy prices fell by 0.3 percent in June after climbing by 0.9 percent in May, while food prices rose by 0.2 percent after coming in unchanged in the previous month.
Excluding food and energy prices, core consumer prices increased by 0.2 percent for the second consecutive month, matching economist estimates.
The core price growth reflected a 0.1 percent uptick in shelter prices as well as higher prices for medical care, used cars and trucks, new vehicles, and recreation.
On the other hand, decreases in prices for apparel, airline fares, and household furnishings and operations limited the upside.
While consumer prices showed only a modest monthly increase, the annual rate of growth still accelerated to a more than six-year high of 2.9 percent in June from 2.8 percent in May.
Core consumer price growth also edged up to 2.3 percent in June from 2.2 percent in May, reaching the highest level since January of 2017.
Andrew Hunter, U.S. Economist at Capital Economics, said the uptick by the annual rate of core consumer price growth keeps the Federal Reserve on track to raise interest rates twice more this year.
“With the labor market exceptionally tight and activity expanding strongly, we think that core inflation has further to rise,” Hunter added. “The prospect of further tariffs on Chinese imports will only add to that upward pressure.”
On Wednesday, the Labor Department released a separate report showing producer prices increased by slightly more than expected in the month of June.
The Labor Department said its producer price index for final demand rose by 0.3 percent in June after climbing by 0.5 percent in May. Economists had expected prices to edge up by 0.2 percent.
Excluding food and energy prices, core producer prices also climbed by 0.3 percent in June, matching the increase seen in May. Core prices had been expected to rise by 0.2 percent.
Compared to the same month a year ago, producer prices were up by 3.4 percent in June, representing the largest 12-month increase since a 3.7 percent jump in November of 2011.
The annual rate of growth in core producer prices also accelerated to 2.8 percent in June from 2.4 percent in May.