--US consumer prices +0.2% in June; core rate +0.3%
--Ex-energy, US June consumer prices +0.3%; energy -0.9%
--US June CPI gasoline prices -2.6%; fuel oil -5.6%
--US June tobacco +0.5; food prices +0.4%
--US June new auto prices -0.1%; prescription drugs +0.6%
--US June consumer shelter prices +0.5%; apparel -0.3%
--US June CPI +3.2% from year ago; core CPI +2.7%
--US real average weekly earnings in June +0.1%

By Simon Kennedy
Washington, July 18 (BridgeNews) - A 0.9% drop in energy prices was offset by more expensive food, airline flights and hotel costs in June, pushing the U.S. consumer price index up 0.2%, the Labor Department said Wednesday.Excluding volatile food and energy costs, "core" consumer prices rose 0.3%.
Although the overall CPI was the smallest since March, analysts had only expected a 0.1% increase and the core CPI to gain 0.2% after they rose 0.4% and 0.1% respectively in May.
Energy prices in June posted their largest decline since March, as natural gas prices plunged 5.6%, the steepest drop since records began in 1952.
Gasoline prices fell 2.6%, the largest fall since March. However, electricity prices gained 3.8%, the steepest climb on record. Also dampening price pressures were lower costs for transportation, automobiles and apparel.
While analysts will welcome the decline in energy prices, they may be concerned by the mixed bag of inflationary pressures that forced up the CPI in June. Food prices jumped 0.4% in June, the largest climb since February, amid broad-based increases. Excluding food, the CPI was up 0.2% in June.
Meanwhile, airline fares surged 5.0%, lodging away from home rose 1.5%, and tobacco costs rose 0.5%. The increase in airline fares was the largest since October 1999. Other price increases were logged by prescription drugs, housing, and education. During the last 12 months, the CPI has moved up 3.2%, while the core CPI has risen 2.7%. For all of 2000, the CPI climbed 3.4% while the core rose 2.6%.
Economists and the Federal Reserve often strip out volatile food and energy costs to get a better reading on the underlying inflation rate. Although higher than expected, the CPI report follows tame import and producer price data, which analysts believe will allow the Federal Reserve to concentrate on weak economic growth rather than inflation.
WHAT WAS EXPECTED:
Analysts' estimates for the June CPI ranged between down 0.1% and up 0.2%, while the expectations for the core rate were up 0.1% and up 0.2%, according to the BridgeNews survey.
OTHER DETAILS:
--The seasonally adjusted CPI-U rose to 177.9 in June, from 177.5 in May.
The index was at 100 for the period 1982-1984. The unadjusted consumer price index rose to 178.0 from 177.7 the prior month. The U.S. Treasury uses the unadjusted CPI-U to compute the inflation impact on inflation-adjusted securities.
--In a separate report, Labor said real average weekly earnings of U.S.non-farm workers rose 0.1% in June following a 0.2% increase the previous month. The rise reflected a 0.3% increase in average hourly earnings, an unchanged number in the average number of hours worked per week, and a 0.2% increase in the consumer price index for urban wage earners and clerical workers (CPI-W).