US consumer prices accelerated sharply in June from May, with a surge in gasoline prices snapping three months of virtually flat inflation, government data showed Wednesday.
The Labor Department said its consumer price index (CPI) rose 0.7 percent, the strongest rise since July 2008 and slightly more than the analyst consensus forecast of 0.6 percent.
The leap in prices followed an unrevised 0.1 percent increase in May, zero change in April and a 0.1 percent decline in March as the world's largest economy grapples with the worst recession in decades.
Gasoline prices jumped 17.3 percent and accounted for 80 percent of the rise in June CPI, the department said.
Core CPI, which excludes energy and food, rose 0.2 percent after an unchanged 0.1 percent rise in May.
On 12-month basis, consumer prices were 1.4 percent lower. Core CPI advanced 1.7 percent, a level believed to be within the Federal Reserve's inflation comfort zone for monetary policy.
The energy price index rose 7.4 percent, as a decline in electricity prices partly offset the sharply higher gasoline prices at the pump.
Food prices edge up 0.1 percent after falling for four consecutive months.
''Inflation has neither gone away nor become a problem,'' said Joel Naroff of Naroff Economic Advisors.
''Investors should like this report as it basically says the Fed is free to do what it has to in order to get the economy going faster. It also doesn't push up the time when the Fed will have to start tightening'' interest rates, he said.
On Wednesday, the Labor Department reported surging energy costs pushed up US wholesale prices by a sharp 1.8 percent in June.
The stronger-than-expected rise in the producer price index (PPI) followed increases of 0.2 percent in May and 0.3 percent in April.
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