U.S. consumer prices rose for a fifth straight month in June as the cost of gasoline and a range of other goods increased, further signs of firming inflation that strengthen the case for an interest rate hike this year.

Other data Friday suggested the economy could support a tightening of monetary policy. Housing starts surged in June and building permits soared to a near eight-year high. Federal Reserve Chair Janet Yellen last week affirmed the U.S. central bank was keen to start raising interest rates later this year.

“The barriers to a Fed hike are starting to crumble. The wait for the first rate hike may not be that much longer,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania.

The U.S. Labor Department said its Consumer Price Index (CPI) rose 0.3 percent last month after increasing 0.4 percent in May. Last month’s increase pushed the year-on-year CPI rate into positive territory for the first time since December.

The energy-driven disinflationary trend appears to have run its course, with producer prices rising in June for a second straight month.

In a separate report, the Commerce Department said groundbreaking for new homes increased 9.8 percent to a seasonally adjusted annual pace of 1.17 million units in June. Permits for future home construction increased 7.4 percent to a 1.34 million-unit rate, the highest level since July 2007.

The acceleration in housing activity should ease concerns that economic growth slowed at the end of the second quarter after a surprise drop in retail sales in June and continued weakness in manufacturing.

“We are seeing strong household formation by the millennial cohort, which is putting pressure on many local housing markets,” said Peter Ciganik, managing director at real estate investment firm GTIS Partners in New York.

Economists anticipate that the housing market will mitigate the drag on the economy from the struggling factory sector.

Firming price pressures, together with a tightening labor market and strengthening housing could give the Fed confidence that inflation will gradually rise toward its 2 percent target.

The Fed has kept its short-term interest rate near zero for more than six years. Most economists believe the Fed will pull the trigger on rates in September.

The U.S. dollar rose against a basket currencies on the data, while prices for shorter-dated U.S. Treasuries fell. Stocks on Wall Street were trading mostly lower, though strong quarterly results from Google boosted technology shares.

While a third report showed consumer sentiment ebbed in early July on international concerns, morale remained at lofty levels, which bodes well for consumer spending.

The University of Michigan’s consumer sentiment index fell to 93.3 from a reading of 96.1 in June. The July reading was the eighth straight month above 90.

The acceleration in inflation in June was broad-based, with a steep increase in egg prices. In the 12 months through June, the CPI edged up 0.1 percent after being unchanged in May.

The so-called core CPI, which strips out food and energy costs, increased 0.2 percent last month after rising 0.1 percent in May.

(SD-Agencies)