A report released by the Labor Department on Friday showed a modest uptick in consumer prices in the U.S. in the month of July.

The Labor Department said its consumer price index inched up by 0.1 percent in July after coming in unchanged in June. Economists had expected prices to rise by 0.2 percent.

Food prices rose by 0.2 percent in July after coming in unchanged in June, while energy prices edged down by 0.1 percent after tumbling by 1.6 percent in the previous month.

Excluding food and energy prices, core consumer prices still crept up by 0.1 percent in July, matching the increases seen in the three previous months. Core prices had also been expected to climb by 0.2 percent.

The uptick in core prices reflected higher prices for shelter, medical care, recreation, apparel, motor vehicle insurance, and airline fares.

The Labor Department said the increases more than offset decreases in prices for new vehicles, communication, used cars and trucks, and household furnishings and operations.

The report said consumer prices in July were up by 1.7 percent compared to the same month a year ago, reflecting a modest acceleration from the 1.6 year-over-year growth in June.

The annual rate of growth in core consumer prices came in at 1.7 percent in July, unchanged from the previous month.

"Overall, although core inflation remains soft, Fed expectations of a rebound early next year look reasonable enough," said Paul Ashworth, Chief U.S. Economist at Capital Economics.

He added, "By then the weaker dollar should be boosting the price of imported goods and the transitory declines this year will drop out of the inflation calculation."

On Thursday, the Labor Department released a separate report showing an unexpected drop in producer prices in the month of July.

The Labor Department said its producer price index for final demand edged down by 0.1 percent in July after inching up by 0.1 percent in June. Economists had expected another 0.1 percent uptick.

Excluding food and energy prices, core producer prices still dipped by 0.1 percent in July after creeping up by 0.1 percent in June. Core prices had been expected to rise by 0.2 percent.

Image Credit: P2P Media