Inflation was absent from the US economy in June for the second month in a row, the US government said yesterday in a report that could help ease worries about increases in interest rates by the Federal Reserve.

The Labour Department said its consumer price index (CPI), the government's main inflation gauge, was unchanged in June after it had come in flat in May.

US Treasury prices rose after the CPI report.

Prior to the May and June reports, the last time the CPI failed to increase for two months in a row or more was in February to April of 1986, when inflation was held down by falling energy prices.

Stripping out the volatile food and energy components, the core CPI rose in June by a scant 0.1 per cent.