(CN) – Consumer prices rose 2.9 percent in June from a year earlier, the fastest page in six, driven by the higher cost of gas, insurance and rent, the Labor Department said Thursday.
For the month itself, the consumer price index, which measures inflation pressures, clumbed just 0.1 percent, but the year-over-year gain was the largest since February 2012.
Solid economic growth and supply bottlenecks have pushed inflation past the Federal Reserve’s 2 percent target, after price gains had languished below that level for six years. That is a key reason that Fed officials expect to raise short-term rates twice more this year.
Price gains may intensify if President Donald Trump makes good on his threat Tuesday to slap tariffs on $200 billion of Chinese goods, including furniture, hats, and handbags. If implemented, those duties, combined with tariffs put in place last week, would mean about half of China’s imports would be subject to extra duties, likely boosting costs for consumers.
The Fed’s preferred inflation gauge has increased at a slower pace, up 2.3 percent in the past year. But most economists expect the Fed will raise rates a total of four times this year as it attempts to keep inflation in check without putting the breaks on growth.
The Associated Press contributed to this report.