The rise in gasoline prices pushed up US consumer prices in May, while energy prices are stabilising while a strong dollar is restricting inflation pressures.
According to the labour department's latest report the consumer price index (CPI) rose 0.4 percent in May after gaining 0.1 percent in April. That was the largest gain since February 2013.
The core CPI, which excludes food and energy costs, rose 0.1 percent, the smallest gain since December, after increasing 0.3 percent in April. Compared with a year earlier, overall prices were unchanged and core prices were up 1.7 percent.
The US central bank on Wednesday stated that energy prices we stabilising and assured that inflation will slowly reach back its 2 percent target. The Fed has kept its interest rates near zero since December 2008.
In May, gasoline prices increased 10.4 percent, the biggest gain since June 2009, a key driver for the increase in the CPI. This was a big jump compared to the 1.7 percent decline in April. On the other hand, food prices remain unchanged for a second time this month.
According to a separate report by the Commerce Department, the current account deficit, which measures the flow of goods, services and investments into and out of the country, increased 9.9 percent to $113.3 billion. This is likely to mirror the dollar's impact on overseas profits and exports as it was the biggest shortfall since the second quarter of 2012.