US consumer prices held steady in June as tumbling energy prices offset small gains in the cost of food and other items, according to a government report today.
Energy prices fell 0.5 per cent, while food costs edged up a mild 0.1 per cent, the Labor Department said.
Outside of those two volatile areas, the core consumer price index (CPI) inched up 0.1 per cent for a second straight month, suggesting underlying inflation may be waning.
The report was likely to bolster betting on Wall Street that the Federal Reserve may soon call a halt to its year-long campaign of interest-rate rises. Economists had expected consumer prices to move up 0.3 per cent with core prices up 0.2 per cent.
The unchanged reading in the overall CPI, which followed the first drop in 10 months in May, brought the year-on-year increase in consumer prices down to just 2.5 per cent, well off the peak of 3.5 per cent hit just two months ago.
It was the lowest 12-month CPI reading since last September, before a big rise in oil prices. Over the past 12 months, core inflation advanced 2 per cent, the smallest year-on-year gain since October.
The drop in energy prices, the second straight monthly decrease, reflected a 1.2 per cent plunge in gasoline prices and a 3.5 per cent slide in the cost of natural gas.
A surge in car buying and widespread gains in almost all sectors pushed retail sales higher in June, the Commerce Department said today. Retail sales rose 1.7 per cent in June. The sales gain was led by auto sales, which rose 4.8 per cent. Excluding autos, sales increased 0.7 per cent.