WASHINGTON, Aug. 10 (Xinhua) -- U.S. core inflation in July rose by the fastest pace in a decade, keeping the Federal Reserve on track to gradually increase interest rates, the Labor Department reported on Friday.
The consumer price index (CPI) in July increased 0.2 percent from a month earlier and 2.9 percent from a year ago, matching market expectations. But excluding the volatile food and energy components, the so-called core CPI rose 2.4 percent from a year earlier, the biggest jump since September 2008, according to the department.
Fed officials see core inflation as a more reliable gauge of underlying price pressures. As the U.S. labor market moves close to full employment and the Trump administration's new tariffs against imports pushes up raw material costs, U.S. inflation pressures will continue to build up, analysts said.
The Fed in June increased interest rates for the second time this year, and penciled in two more rate hikes for the year. Most market participants expected the central bank to raise rates again in September and December.
Fed Chairman Jerome Powell told lawmakers last month that for now, "the best way forward" for the central bank is to keep gradually raising interest rates.