WASHINGTON – Rising gasoline prices pushed inflation up modestly in June.
The Labor Department says its consumer price index rose 0.3 per cent last month. Prices at the pump rose 3.4 per cent in June on top of a 10.4 per cent increase in May. An outbreak of avian flu drove egg prices up 18.3 per cent in June, but overall food prices rose just 0.3 per cent. Excluding volatile food and energy prices, so-called core inflation rose 0.2 per cent last month.
The June numbers were about what economists had expected.
Overall consumer prices rose just 0.1 per cent the past year; core prices are up 1.8 per cent. Gasoline prices are down 23.3 per cent over the last year; they hit bottom in January, then rebounded.
Inflation is running below the Federal Reserve’s 2 per cent target. But Fed chair Janet Yellen told Congress this week that the central bank is likely to lift short-term interest rates later this year. The Fed has kept the rate it controls near zero for more than six years, first to calm financial markets after the panic of 2008 and then to bolster a weak recovery from the Great Recession of 2007-2009. But the U.S. economy has shown steady improvement. Employers are adding a healthy 208,000 jobs a month so far this year, and the unemployment rate has tumbled to a seven-year low 5.3 per cent.