The Labor Department said yesterday its Consumer Price Index increased 0.4 per cent last month, with food prices posting their biggest rise since August 2011.
The uptick in price pressures should comfort some Federal Reserve officials who had worried inflation was running too low. Still, a separate inflation gauge watched most closely by the Fed continues to run below the US central bank’s 2 per cent target.
The Fed is expected to further trim its monthly bond buying programme, but is not seen raising interest rates until mid- 2015.
A separate report from the Commerce Department showed housing starts and permits fell in May, a sign that the housing recovery could remain in slow mode.
Fed chair Janet Yellen has warned that a protracted housing slowdown could undermine the economy.
US stock index futures turned negative on the data, while prices for US Treasury debt fell. The dollar hit session highs versus the yen and the euro.
Last month’s increase in consumer prices was the largest since February 2013 and above economists’ expectations for a 0.2 per cent gain. It followed a 0.3 per cent advance in April.