The consumer price index, the government's main gauge of inflation, rose in June, easing deflation concerns on Wall Street. The core index, which excludes volatile food and energy prices, held steady.
Economists predicted the 0.2% upturn in the CPI, reported Wednesday by the Labor Department, after the index remained flat in May. It was the first increase in the index since March. The news suggests that the possibility of deflation, a concern recently acknowledged publicly by the
, is growing increasingly remote. However, economists also predicted a slight gain in the core index of 0.1%, according to Briefing.com, and that gauge was unchanged for the month.
Prices rose across the board, notably in energy and food, which jumped 0.8% and 0.4%, respectively. But electricity prices fell 0.4%, their biggest drop in more than six months, and automobile prices fell 0.2% as automakers struggled to sell off excess inventories.
Meanwhile, industrial production rose 0.1% in June after rising the same amount in May, according to the Federal Reserve, signaling that one of the weakest links in the economy of late may be gaining vitality. America's factories remained working at 74.3% of capacity for the month. Both of these results were in line with economists' expectations.
Separately, business inventories fell 0.2% to a seasonally adjusted $1.17 trillion in May, the Commerce Department said. Business sales were unchanged during the month, after dropping 1.7% in April.