US consumer prices rose modestly in June

The Labor Department said Friday that consumer prices increased 0.2 percent last month, matching the uptick in May. Prices are up 1 percent from a year ago, well below the Federal Reserve's 2 percent inflation target.

Excluding the volatile food and energy categories, prices were up 0.2 from May and 2.3 percent from June 2015.

The Fed, which meets July 26-27, wants to see evidence that inflation is ticking up before raising short-term U.S. interest rates again. In December, it raised rates for the first time since 2006. But it has hesitated to follow up with more increases. The American job market looked weak in May before rebounding in June. And Britain's June 23 decision to leave the European Union has rattled financial markets and raised uncertainty about the global economy.

Food prices fell for a second straight month in June. Energy prices rose 1.3 percent, including a 3.3 percent increase in gasoline prices. Rents rose 0.4 percent.

New car and truck prices fell for the third straight month and are down 3.1 percent over the past year. Clothing prices fell 0.4 percent in June.

Separately Friday, the Commerce Department reported that U.S. retail sales posted a healthy increase in June, another sign that consumer spending picked up in the spring.

Sales at retailers and restaurants rose 0.6 percent from May after, after a 0.2 percent climb in May. Sales were up 2.7 percent from a year earlier. Excluding volatile spending on cars and auto parts, sales were up 0.7 percent.

Spending on building materials and gardening supplies surged 3.9 percent, the most since April 2010.

Consumers got off to a slow start this year, which is one reason the economy grew at a lackluster 1.1 percent annual pace from January through March. Economists expect spending to drive faster growth from April through June and the rest of the year.