US consumer prices up as fuel and food costs rise

US consumer prices rose for a fifth straight month in June, pushed higher by a rise in the cost of fuel and food.

Prices rose 0.3% last month after increasing by 0.4% in May, according to the Labor Department’s Consumer Price Index.

Continuing price rises are likely to strengthen the case for an increase in US interest rates.

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However, the year-on-year rate is still only 0.1%, although excluding food and fuel so-called core inflation was 1.8%.

Federal Reserve chair Janet Yellen said this week that a rate rise this year was likely if the economy continued to grow.

Prices at the pump rose 3.4% in June on top of a 10.4% increase in May. Egg prices surged 18.3%, the biggest gain since August 1973.

Jobs market

Other US data on Friday also pointed to a strengthening of the US economy.

The Commerce Department said house building jumped by 9.8% in June, while the number of building permits issued rose 7.4% to a near eight-year high.

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The Fed has kept its short-term interest rate near zero for more than six years, but many economists believe rising prices will trigger a rate rise later this year.

Ms Yellen has said she wants to see more improvements in the economy, particularly the jobs market, but expects rates to rise modestly by the end of the year.

Employers have been adding a healthy 208,000 jobs a month so far this year, and the unemployment rate has fallen to a seven-year low of 5.3%.

The dollar rose to a session high against a basket of currencies on the data.