Rising gas prices increase inflation

Associated Press

WASHINGTON

Rising gasoline prices pushed inflation up modestly in June, leaving overall consumer prices higher than they were a year earlier for the first time since December.

Economists say the uptick in consumer prices makes it more likely the Federal Reserve will end a policy of keeping short-term interest rates near zero for more than six years.

The Labor Department said Friday that its consumer price index rose 0.3 percent last month. Prices at the pump rose 3.4 percent in June on top of a 10.4 percent increase in May. An outbreak of avian flu drove egg prices up 18.3 percent in June, but overall food prices rose just 0.3 percent. Excluding volatile food and energy prices, so-called core inflation rose 0.2 percent last month.

The June numbers were about what economists had expected.