Cost of living in the US edged up in June, boosted by an increase in fuel prices and sustained gains in rents.
The inflation rate rose 0.2 percent for a second consecutive month, the Labor Department showed on Friday.
Increase in energy costs and waning dollar strength is helping companies charge their customers a bit more. This upward pressure and improving economy, supported by a healthy labor market would likely allow Fed resume rate hike discussion.
“We’re starting to see upward pressure on the inflation numbers,” said Jim O’Sullivan, a chief U.S. economist at High Frequency Economics Ltd. “It reinforces the case for the Fed to resume tightening, though they’re highly risk averse right now.”
Year-on-year, cost of living rose 1 percent in June.
While core consumer prices excluding energy and volatile goods climbed 0.2 percent, year-on-year, core inflation rose from 2.2 percent to 2.3 percent. Making it the largest year-to-year advance since the current economic expansion began in 2009.
Energy costs rose 1.3 percent in June, while food prices plunged 0.1 percent.