WASHINGTON — The price of a broad array of goods and services edged higher in June to generate the biggest increase in consumer prices in four months, but signs of building inflationary pressure were hard to find in the U.S. economy.
The consumer price index rose by a seasonally adjusted 0.5 percent last month, the Labor Department said on Tuesday. That matched the forecast of economists polled by MarketWatch.
The cost of energy rose 3.4 percent in June. Gas prices, which barely rose at the pump, showed a 6.3 percent spike on a seasonally adjusted basis. Normally prices fall in June, but that didn’t happen this year, accounting for the large increase.
During the first half of 2013, gas prices have moved sharply up and down. In the past year, unadjusted gas prices have risen a mild 2.8 percent.
The price of food, another major household expense, rose 0.2 percent in June largely because of higher costs for cereal, baked goods, meat, fish and eggs.
Excluding food and energy, “core” consumer prices advanced 0.2 percent, in line with expectations. The core rate is viewed by the Federal Reserve as a more useful gauge of underlying inflationary trends.
In the past 12 months, the core rate of inflation has risen a scant 1.6 percent, the lowest rate in two years.
The overall inflation rate, however, climbed to 1.8 percent in June from 1.4 percent in May on a year-over-year basis.
Higher inflation in June kept a lid on the earnings of American workers. Average hourly pay was flat last month and is up just 0.4 percent over the past 12 months. The slow rise in wages largely explains consumers’ cautious spending habits and the U.S. economy’s corresponding struggle to ratchet up to a faster pace of growth.
Still, inflation remains quite low by historical standards, and that has allowed the Fed to pursue a controversial low-interest-rate strategy that involves the purchase of tens of billions of dollars in government and mortgage-related bonds each month.
“Despite the Fed’s ongoing efforts geared toward spurring more rapid growth, inflation has remained very much in check,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors.