US inflation slips back in June

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Falling food and energy prices helped US wholesale prices rise slower in June, its first fall since January.

Producer price inflation fell 0.2% last month, the US Labor Department said.

But the core number - which excludes volatile food and energy prices - rose 0.3%, mainly as a result of rising car and light truck sales.

Economists said the latest figures were unlikely to persuade the Federal Reserve to change its stance on interest rates.

Last month the Fed kept rates steady at 5.25%, saying it had concerns that inflation might fail to "moderate".

Economic worries

The Fed continues to believe that inflation posses the biggest threat to the US economy, and has so far taken a wait-and-see attitude on the current economic slowdown.

News of the dip in inflation comes a day before Fed chief Ben Bernanke delivers his half-year economic forecast to Congress, and analysts widely expect him to continue to signal that rates will remain on hold for the rest of the year.

"The Federal Reserve has been looking for a soft landing. This provides continued comfort that there is no inflation problem in America," said David Kelly, economic adviser at Putnam Investments.

Further economic figures released showed US industrial output rose 0.5% in June following a 0.1% dip in May.

Experts said the rise was generally in line with forecasts and was a result of manufacturers boosting their output after winter cutbacks and moves to cut stockpiles in the wake of slowing sales.