The cost of living rose in June by the most in four months as gasoline prices increased, the U.S. Labor Department said today, Bloomberg reported.


The Consumer Price Index (CPI) increased 0.5 percent after a 0.1 percent gain the prior month, according to the Labor Department report.


The median forecast in a Bloomberg survey called for a 0.3 percent rise. The biggest advance in gasoline prices in four months accounted for about two-thirds of the gain the in the CPI. The core measure, which excludes food and fuel, climbed 0.2 percent from May.


Some retailers, such as Pier 1 Imports Inc., are prepared to reduce prices to attract shoppers should demand weaken. Inflation readings closer to the Federal Reserve's goal will give the central bank the flexibility to move forward later this year with reductions in its monthly asset purchases designed to stoke the economy, Bloomberg said.


Overall consumer prices increased 1.8 percent in the 12 months ended in June, more than projected, after a 1.4 percent year-over-year gain in May. Read more.