US consumer prices unchanged in June

[WASHINGTON] US consumer prices were unchanged in June as the cost of gasoline and mobile phone services declined further, pointing to benign inflation that could cast doubts on the Federal Reserve's ability to increase interest rates for a third time this year.

The Labor Department said on Friday that the unchanged reading in its Consumer Price Index followed a 0.1 per cent dip in May. The lack of a rebound in the CPI in June could trouble Fed officials who have largely viewed the recent moderation in price pressures as transitory.

In the 12 months through June, the CPI increased 1.6 per cent - the smallest gain since October 2016 - after rising 1.9 per cent in May. The year-on-year CPI has been softening steadily since February, when it hit 2.7 per cent.

Economists polled by Reuters had forecast the CPI edging up 0.1 per cent last month and climbing 1.7 per cent from a year ago.

The so-called core CPI, which strips out food and energy costs, edged up 0.1 per cent in June, rising by the same margin for three straight months. The core CPI increased 1.7 per cent year-on-year after a similar gain in May.

REUTERS