The consumer price index is a broad indicator of what Americans pay for everything. The index rose 0.3 percent in June after increasing 0.4 percent in May, according to the Labor Department. Economists surveyed by The Wall Street Journal had estimated a 0.3 percent increase.
Excluding food and energy prices, which are considered volatile items, the index rose only 0.1 percent for June. Meat prices rose 0.2 percent in June after jumping 1.4 percent in May, whereas the price of dairy, food and vegetables fell.
Gasoline prices rose 3 percent last month, accounting for two-thirds of the increase. Conflict in Iraq pushed prices up, but many economists believe summer prices have reached their peak.
The Federal Reserve set a 2 percent inflation milestone before they raise short-term interest rates. Higher consumer prices signal inflation is moving toward this goal. While inflation has consistently undershot the Fed's expectations for the last two years, it has risen in the past few months, which, coupled with the strengthening labor market, could lead to a sooner-than-expected rise in near-zero interest rates.