Uptick in US consumer prices in JuneBusiness | 14 Jul 2020 9:39 pm
US consumer prices increased by 0.6 percent in June, after three months of declines, with a big jump in gasoline prices accounting for over half of the gain.
The Labor Department reported Tuesday that the increase in ts consumer price index followed declines of 0.4 percent in March, 0.8 percent in April and 0.1 percent in May as the hit to demand caused by the widespread shutdowns of the economy kept a lid on prices.
The June report showed that energy prices jumped 5.1 percent with gasoline costs surging by 12.3 percent. However, even with that gain gasoline pump prices are 23.4 percent below where they were a year ago.
Core inflation, which excludes food and energy, increased by a more modest 0.2 percent in June the first monthly increase since February.
Over the past 12 months, consumer prices have increased a modest 0.8 percent while core inflation is up just 1.2 percent.
That is well below the Federal Reserve's 2 percent target for annual gains in inflation. Economists believe given the uncertain economic outlook with virus cases climbing again in many parts of the country, inflation pressures are likely to remain low for some time to come.
Low inflation means that the Fed will have the leeway to keep providing significant support to the economy through record-low interest rates and sizable backed purchases of Treasury bonds and mortgage-backed securities.
In addition to the 5.1 percent gain in energy costs, food pries were up by 0.6 percent in June after a 0.7 percent May increase.-AP