U.S. consumer prices recorded their largest increase in more than a year in May as costs for a range of goods and services rose, pointing to a steady firming of inflation pressures.
Continue Reading Below
The Labor Department said on Tuesday its Consumer Price Index increased 0.4 percent last month, with food prices posting their biggest rise since August 2011.
The uptick in price pressures should comfort some Federal Reserve officials who had worried that inflation was running too low. Still, the main inflation gauge watched by the Fed continues to run below the U.S. central bank's 2 percent target.
Fed officials start a two-day policy meeting on Tuesday. The Fed is expected to further trim its monthly bond buying program, but is not seen raising interest rates until mid-2015.
Last month's increase in consumer prices was the largest since February 2013 and above economists' expectations for a 0.2 percent gain. It followed a 0.3 percent advance in April.
In the 12 months through May, consumer prices increased 2.1 percent, the biggest rise since October 2012. That came on top of a 2.0 percent rise in April and was above economists' expectations for a year-on-year increase of 2.0 percent.
Stripping out food and energy prices, the so-called core CPI rose 0.3 percent, the largest increase since August 2011. It had risen 0.2 percent in April. In the 12 months through May, the core CPI increased 2.0 percent. That was the biggest gain since February of last year and followed a 1.8 percent rise in April.
Economists had forecast the core CPI rising 0.2 percent from April and 1.9 percent from a year-ago.
Food prices increased 0.5 percent in May, rising for a fifth consecutive month. Prices for meat, dairy, fruit and vegetables rose. Poultry and fish prices also increased as did the cost of eggs.
Gasoline prices increased 0.7 percent. Prices for electricity also rose after declining in the prior month.
The core CPI was lifted by a 0.3 percent rise in rent. There were also increases in medical care costs, apparel, new cars prices and airline fares.