A key U.S. inflation gauge accelerated in July as gasoline prices rose, a government report Tuesday showed.

The Consumer Price Index rose by 0.3% in July, compared with a 0.1% gain in June, the Labor Department said in a statement. The increase was in line with economists' predictions. 

Over the past 12 months, consumer prices have risen 1.8%, faster than the 1.7% increase through June but still considered a muted level given that the U.S. unemployment rate is close to its lowest level in a half century. Typically, low unemployment forces employers to raise wages, in turn fueling inflation. 

Excluding prices for food and energy items, which can vary widely, the index rose 0.3% in July, the same as in June, but faster than the 0.2% increase forecast by economists. Over the past year, the so-called core inflation index is up 2.2%.

"The July rise was broad-based, with increases in the indexes for shelter, medical care, airline fares, household furnishings and operations, apparel, and personal care all contributing to the increase," according to the statement.

Investors have been closely monitoring inflation, since Federal Reserve officials led by Chairman Jerome Powell have cited the low pace of price increases as a primary reason for their decision last month to cut official U.S. interest rates for the first time in more than a decade.