The Labor Department reported on Tuesday that its Consumer Price Index increased 0.5 percent in June from May. Two-thirds of the gain came from a 6.3 percent jump in gas prices, the largest since February.

Excluding volatile food and energy costs, so-called core prices rose just 0.2 percent.

Consumer prices have been stable this year, giving the Federal Reserve room to continue efforts to stimulate the economy.

Over all, prices rose just 1.8 percent in the last 12 months. And core prices rose just 1.6 percent in that period — the smallest 12-month change in two years. Each measure was below 2 percent, the Fed’s inflation target.

Slow economic growth and high unemployment have kept wages from rising quickly. That has made it harder for retailers and other businesses to increase prices.

In June, prices for all energy products rose 3.4 percent, mostly because of the surge in gas costs. Other prices changed little.

The gas price surge was caused by a jump in global oil prices, which was influenced by the political turmoil in Egypt. Chris G. Christopher Jr., director of consumer economics at IHS Global Insight, predicted prices at the pump would fall once conditions stabilized in Egypt.

Food prices edged up 0.2 percent. New-car prices increased 0.3 percent but were up just 1.3 percent over the last year. Clothing prices rose 0.9 percent in June but were up just 0.8 percent over the last 12 months. Prices for used cars fell 0.4 percent and were down 2.3 percent over the last year.

The Federal Reserve reported on Tuesday that manufacturing production rose 0.3 percent in June from May, as factories made more business equipment, home electronics and cars. That followed a 0.2 percent gain in May. Still, the two consecutive gains barely offset declines in March and April.

Overall industrial production, which includes factories, mines and utilities, also rose 0.3 percent in June. Mining output increased 0.8 percent and utility output slid 0.1 percent.

Manufacturing is the most critical component of industrial production. The recent gains are a hopeful sign that factories could help the economy grow in the second half of the year.

The “report confirms the picture of a moderate recovery in the manufacturing sector,” Annalisa Piazza, senior economist at Newedge Strategy, wrote in a research note.

Manufacturers have struggled this year, providing little support to the economy. Their output was up just 1.8 percent in the last 12 months. And factories cut jobs in each of the last four months, shedding 24,000 since February.

Slower global growth has cut demand for American exports. Europe is still in a recession and China’s economy grew from April through June at the slowest pace in more than two decades.

Article source: http://www.nytimes.com/2013/07/17/business/economy/gas-raises-consumer-prices-but-inflation-remains-tame.html?partner=rss&emc=rss