WASHINGTON – Inflation in the U.S. was flat in June.
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The consumer-price index, which measures what Americans pay for everything from ice cream to eye-doctor visits, was unchanged in June from the prior month, the Labor Department said Friday. Excluding the often-volatile categories of food and energy, so-called core prices rose 0.1%.
Economists surveyed by The Wall Street Journal had expected overall prices to advance 0.1% and core prices to gain 0.2% on the month.
From a year earlier, consumer prices climbed only 1.6%, marking the fourth straight month annual gains have eased. Prices were up 1.7% on the year when excluding food and energy.
The report is the Federal Reserve's last peek at a major inflation gauge before officials conclude a two-day policy meeting July 26. The central bank has raised short-term interest rates three times since December but is expected to leave its benchmark unchanged later this month.
The Fed is tasked with achieving maximum sustainable employment and stable prices. With unemployment at 4.4% in June, it appears the Fed has closed in on one half of its mandate. Inflation, however, is well shy of its target.
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The Fed's preferred inflation gauge, the Commerce Department's price index for personal consumption expenditures, poked above the central bank's 2% goal in February for the first time in nearly five years. It has settled lower each month since. The most recent data, for May, showed a 1.4% year-over-year gain.
Low inflation is one reason for the Fed to move cautiously on interest rates, though officials say the phenomenon is likely to fade.
"It's premature to reach the judgment that we're not on the path to 2% inflation over the next couple of years," Chairwomen Janet Yellen told lawmakers on Wednesday. "We're watching this very closely and stand ready to adjust our policy if it appears that the inflation undershoot will be persistent."
The consumer-price index tends to run a little bit higher than the personal-consumption index, reflecting different methods for calculating inflation. Both gauges have followed the same pattern, with price gains peaking in February and then easing.
In the June CPI report, prices were held in check by falling energy costs. The gasoline index decreased 2.8% from May and was down 0.4% from a year earlier. Food prices held steady last month, and were up 0.9% from a year earlier.
Shelter costs--which account for about a third of the overall price index--increased 0.2% on the month and rose 3.3% on the year.
A separate Labor Department report showed average weekly earnings for private-sector workers, adjusted for inflation, increased 0.5% in June from the prior month. From a year earlier, inflation-adjusted weekly earnings were up 1.1%.
The Labor Department's latest report on the consumer-price index can be accessed at: https://www.bls.gov/news.release/cpi.nr0.htm
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(END) Dow Jones Newswires
July 14, 2017 08:45 ET (12:45 GMT)