The consumer price index increased 0.4% in May, the biggest advance since February 2013, after climbing 0.3% the prior month, a Labor Department reported.
The median forecast of 81 economists surveyed by Bloomberg News called for a 0.2% increase. Excluding volatile food and energy prices, the gain was the largest in almost three years.
“We’re seeing signs of pressure,” Samuel Coffin, an economist at UBS Securities said. “Improvement in the labor market and continued signs of price pressures that are a bit greater than we’ve been seeing, that will encourage a new set of thinking for the Fed.”
Last month’s increase in consumer prices exceeded all forecasts in the Bloomberg survey, which ranged from no change to a 0.3% advance.
The Labor Department’s inflation report showed that stripping out volatile food and fuel, the so-called core measure increased 0.3%, the most since August 2011, and following a 0.2% gain the prior month. Economists had forecast a 0.2% advance, according to the survey median.
The core index increased 2 % from the same month in 2013 after a 1.8 % gain in April.