U.S. consumer prices increased 0.3% in June, slightly slower than the month prior, suggesting that inflation may have stabilized.

The Labor Department said on Tuesday that June’s increase was primarily driven by the gasoline index, which was up 3.3% and accounted for two-thirds of the total increase. The core gauge (all items less food and energy) increased 0.1%, following a 0.3% increase in May.

The deceleration in the rate of growth of consumer prices may calm some fears regarding the pace of inflation. As inflation increases and essential purchases become more expensive, consumers have less money for discretionary spending, which can hurt the overall economy.

“Energy prices did increase on the gasoline front but relief is on the way in July and August,” said Chris Christopher, consumer economist for IHS, referring to more oil coming online from Libya and northern Iraq, putting pressure on wholesale oil prices. 

Christopher added that the slowdown in food-price growth  – 0.1% in June, following a 0.5% increase in May – is also comforting when it comes to inflation fears.

Other analysts still worry, however, that inflation has been rising too quickly, and is getting ahead of the Federal Reserve’s targets. Fed officials have indicated that they do not intend to raise interest rates until mid-2015.

“The inflation numbers are enough for investors to pay attention to, but not enough to sway the thinking of Fed,” said Greg McBride, the chief financial analyst for Bankrate.com.  

McBride said the Fed is looking more closely at the Personal Consumption Expenditures Index (PCE), which is released quarterly. The May PCE showed a 1.8% increase year-over-year, which is well below the 2% inflation rate the Fed is looking for.

“The risk is that the Fed is behind the curve on inflation, and it’s getting away from them a little bit,” said McBride.  “But the economic implications of [inflation] are that it could really be a headwind to economic growth, and we’re already in a slow-growth economy.”

McBride said it’s important to remember that one month’s numbers do not necessarily indicate a slowdown. Over the last 12 months, the CPI has increased 2.1%, which is above the target rate.

“That’s more than a lot of households have seen their income go up over that time, and that’s the reality for a lot of households: Their incomes are not keeping up with increasing expenses,” said McBride.

Inaction Driven by Yellen?

John Ryding, chief economist for RDQ Economics, agreed with McBride that the Fed is unlikely to make any decisions based on the latest CPI number. But Ryding said the decision to look the other way when it comes to inflation seems to be driven by Fed chair Janet Yellen, and does not represent the sentiment of all the participants of the FOMC.

“It strikes me there are a number of (regional) Fed presidents who are uncomfortable with inflation developments and the potential [outcome] if the Fed isn’t adjusting policy, but Yellen is undoubtedly dismissive of the inflation threat … in June, she dismissed the inflation pickup as noise,” said Ryding.

Ryding suggested the Fed may need to act earlier than mid-2015 if it wants to prevent inflation from getting out of hand. He said the Fed’s own models suggest that hiking interest rates won’t have an effect on inflation for at least three years – which could significantly impact consumers in the meantime.

But Christopher maintains that the latest CPI numbers show the Fed has been right in its thinking all along.

“They have been a little dismissive, as have we, of the headlines,” said Christopher.

Follow Gabrielle Karol on Twitter @GabrielleKarol