US consumer inflation rose modestly in June as falling energy prices helped offset price gains in food, housing and medical care, the US government said today.
The Labour Department said its consumer price index, the nation's broadest gauge of inflation, rose 0.2 per cent in June after a 0.4 per cent gain during the previous month.
Excluding volatile food and energy prices, the so-called core index rose 0.3 per cent after a 0.1 per cent advance in May.
Though modest, those price gains in June were slightly higher than what economists expected. US economists polled by Reuters forecast overall consumer prices would rise by just 0.1 per cent in June and by 0.2 per cent when food and energy prices were excluded.
"This is okay news on inflation," said Mr Kurt Karl, US chief economist at Swiss Re in New York.
"As with producer prices, we'll see more benefits from lower energy prices over the next few months. There is no major worry here. No components are rising rapidly," he added.
June's price gains were kept relatively in check by declining energy prices, down 0.9 per cent after a 3.1 per cent advance in May, as gasoline prices fell 2.6 per cent.
Prices of natural gas fell 5.6 per cent - the largest decline since the government began tracking such prices in 1952.
But within the energy category, prices for electricity rose 3.8 per cent in the latest month, the largest gain on record since 1952.
Year-on-year, consumer prices were up 3.2 per cent while core prices were up 2.7 per cent. While the overall year-on-year price gain remains high, that figure is well below the 3.6 per cent year-on-year advance seen in May.
First Union economist Mr Mark Vitner said the June gain in consumer prices was largely attributable to housing price gains, which have a large weighting in the index.
"With previous month, the CPI shows inflation is still relatively well behaved," he said, adding that prices in the service sector were the area of main concern at the moment.