U.S. consumer prices stabilize in June

U.S. consumer prices stabilize in June, but core prices index which excludes energy and food prices continued to firm.

Consumer Price Index (CPI), a main gauge of inflation, increased 0.2 percent in June on a seasonally adjusted basis, the same growth in May, said the Labor Department on Friday. On a year-on-year basis, the index increased 1 percent, also the same growth in May.

The energy index increased 1.3 percent in the month, while food index fell 0.1 percent. Excluding the volatile food and energy categories, the so-called core CPI went up 0.2 percent in June on a seasonally adjusted basis, the same growth in May. The core CPI was up 2.3 percent from a year earlier, higher than May's 2.2 percent increase.

However, the core personal consumption expenditure price index, the Federal Reserve's favored inflation gauge, increased 1.6 percent year on year in May, below the central bank's 2 percent inflation target.

As the transitory effects of past declines in energy and import prices dissipated and the labor market strengthened further, most Fed officials expected that inflation would rise to 2 percent over the medium term, the minutes of the Fed's June monetary policy meeting showed recently.

However, some Fed officials disagreed over their judgment about the inflation outlook, the minutes showed. Some officials observed that core inflation had risen, while several others continued to see downside risk to inflation.

Some Fed officials, including the Fed governor Daniel Tarullo, recently called for more patience on interest rates hikes due to low inflation and the uncertainty surrounding the exit of U.K. from the European Union. Enditem