MercoPress. South Atlantic News Agency

US economy good news: inflation reaches 1.1% and housing starts rise 6.6%

Commerce Department figures showed housing starts rose by 6.6% in April to a seasonally adjusted annual pace of 1.17 million units.

US consumer prices rose at their fastest pace in three years in April as energy prices climbed, figures show. The Labor Department's Consumer Price Index rose 0.4% last month, the biggest one-month increase since February 2013.

 A steady build-up in inflation could increase the likelihood that the Federal Reserve will raise interest rates later this year. Other data shows housing starts rose by more than expected last month, suggesting an economy gaining strength.

Commerce Department figures showed housing starts rose by 6.6% in April to a seasonally adjusted annual pace of 1.17 million units.

The Labor Department's inflation figures showed energy prices increased by 3.4% in April, the biggest rise in three years, mainly due to an 8.1% increase in petrol prices.

The annual pace of CPI inflation rose to 1.1% last month from 0.9% in March.

Investors are keenly assessing data to try to predict when the Fed will actually raise interest rates. In December 2015, the US Federal Reserve raised interest rates by 0.25 percentage points - its first increase since 2006.

At the time the Fed said it would continue to monitor a number of factors, including inflation and economic performance, to determine if and when further rises were justified.

Some Fed officials have so far suggested two increases this year, but traders are pricing in only one rise at the end of the year. The Fed's next meeting is in June.

Meanwhile, US industrial production in April rose 0.7%, its biggest increase since November 2014, as utility output surged. That gain in factory output also supports the view that the economy is making progress.