Surging gasoline prices in the United States helped trigger another big increase in consumer inflation in May, and one closely watched price gauge rose at the fastest pace in 11 years.
The Labor Department reported Wednesday that its Consumer Price Index rose 0.4 percent last month, in line with expectations, while core inflation, which excludes food and energy, was up a worse-than-expected 0.3 percent.
Private economists said the latest news on inflation virtually guaranteed a 17th straight interest rate hike by the Federal Reserve at the end of this month based on recent comments by Chairman Ben Bernanke and his colleagues that they are determined to combat rising price pressures.
Wall Street, however, greeted the latest report with relief because it did not paint an even worse picture on inflation. Much of the rise in non-energy costs was blamed on a statistical quirk in how the government measures shelter costs.
The Dow Jones industrial average rose by 110.78 points to close at 10,816.92, a rebound that followed declines fueled by inflation worries in six of the past seven trading days.
Some analysts said they believed that the Fed will be able to wrap up its two-year-long credit-tightening campaign with just one or at most two more rate hikes, reports AP.