US consumer prices increase as expected in July

WASHINGTON, Aug. 12 (Reuters) - U.S. consumer prices increased slightly in July, potentially weakening the argument for an interest rate increase from the Federal Reserve next month.

The Consumer Price Index edged up 0.1% last month after dropping 0.4% in June, which was the first decline in six years, the Labor Department's Bureau of Labor Statistics said on Wednesday.

In the 12 months through July, the CPI advanced 3.4% after rising 3.5% in June. Excluding the volatile food and energy components, the CPI gained 0.2% last month after being unchanged in June. The so-called core CPI increased 2.5% in the 12 months through July after climbing 2.6% in June.

Economists polled by Reuters had forecast the CPI rebounding 0.1% and core inflation rising 0.2% over the month.