US inflation rises as expected, Labor Department reveals

US inflation rose in June compared to a year ago as rents increased by the most in almost two years, data showed on Friday.

The Labor Department revealed the consumer price index (CPI) grew 0.1% year-on-year in June, up from 0% in May, as expected analysts.

On a month-on-month basis CPI climbed 0.3% in June after gaining 0.4% in May, matching forecasts.

Rents jumped on the growing number of people choosing to live in apartments rather than owing a home.

The core inflation rate, excluding food and energy, was up 1.8% higher than a year ago, higher than 1.7% in May.

“The uplift in core inflation pours further fuel on expectations of US rates rising by the end of the year," said Chris Williamson, chief economist at Markit.

"Recent comments from Fed chair Janet Yellen point to the growing likelihood of interest rates starting to rise later this year, stressing that the Fed is keen to start the process of normalising monetary policy after more than six years of near-zero interest rates. A rise could come as soon as September, when policymakers will have seen what’s likely to be a chunky GDP number for the second quarter."