U.S. import prices rose less than expected in June as a drop in the cost of food offset an increase in petroleum, suggesting imported inflation pressures remained benign.
The Labor Department said on Tuesday import prices edged up 0.1 percent last month after increasing by a revised 0.3 percent in May.
Economists polled by Reuters had forecast import prices rising 0.3 percent after a previously reported 0.1 percent gain in May. In the 12 months through June, prices increased 1.2 percent, the largest rise since March 2012.
Sluggish global demand and a fairly strong dollar are keeping imported inflation subdued. Domestic inflation, however, is steadily creeping as the labor market gradually tightens.
That could put the Federal Reserve on course to start increasing interest rates by the second half of next year.
Imported petroleum prices increased 1.4 percent in June after rising 2.2 percent in May. Imported food prices fell 1.7 percent, the largest drop since February 2012. Food prices had declined 0.5 percent in May.
Import prices excluding petroleum fell 0.2 percent. The Labor Department report also showed export prices fell 0.4 percent in June after edging up 0.1 percent the prior month.
In the 12 months through June, export prices rose 0.2 percent.
New York state manufacturing growth jumps in July
A gauge of manufacturing in New York state rose to a more than four-year high in July boosted by more shipments and a larger number of employees, the New York Federal Reserve said in a report on Tuesday.
The New York Fed's Empire State general business conditions index rose to 25.60, the highest level since April 2010, from 19.28 in June. Economists polled by Reuters had expected a reading of 17.00 and the highest estimate was 21.
Growth in new orders edged up to 18.77 from 18.36, while inventories shrank, hitting -3.41 from 9.68.
Employment gauges were mixed. The index for the number of employees rose to 17.05 from 10.75 while the average employee workweek index fell to 2.27 from 9.68.
Read MoreYellen could keep market rally going
Shipments rose to 23.64 from 14.15 last month, while prices paid rose to 25.00 from 17.20.
The index of business conditions six months ahead fell to 28.47 in July from 39.84 in June.
The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.