Gasoline, food boost U.S. consumer inflation in June

U.S. consumer prices increased by the most in nearly eight years in June as businesses reopened, but the underlying trend suggested inflation would remain muted and allow the Federal Reserve to keep injecting money into the ailing economy.

The Labor Department said on Tuesday its consumer price index increased 0.6% last month, the biggest gain since August 2012, after easing 0.1% in May. The increase, which ended three straight months of declines, was driven by rises in the prices of gasoline and food.

In the 12 months through June, the CPI climbed 0.6% after gaining 0.1% in May, which was the smallest year-on-year rise since September 2015.

Economists polled by Reuters had forecast the CPI increasing 0.5% in June and advancing 0.6% year-on-year.

Businesses have reopened after shuttering in mid-March to slow the spread of Covid-19. But new cases of the respiratory illness have surged in large parts of the country, prompting some states to dial back or pause reopenings.