NEW YORK (CNN/Money) - U.S. consumer prices posted a slight gain in June, the government said Wednesday, in a report showing inflation remains a distant threat to the world's largest economy.

The consumer price index, a broad measure of retail prices, rose 0.2 percent after showing no change in May, according to a Labor Department report.

The so-called "core-CPI," which excludes volatile food and energy prices, was unchanged after rising 0.3 percent in May. Economists, on average, expected CPI to rise 0.2 percent and core CPI to rise 0.1 percent, according to a Reuters poll.

The 12-month change in the core CPI was just 1.5 percent, matching the weakest year-over-year change in core consumer inflation since 1966.

"We're still far from deflation, but not far from a deceleration in inflation, and that's why policy makers have to remain vigilant," said Anthony Chan, chief economist at Banc One Investment Advisors.

U.S. stock prices declined after an initial advance spurt in early trading, while Treasury bond prices fell for a second day, driving interest rates higher.

Economists and policy makers have kept a wary eye on inflation in recent months; though falling prices are a good thing in many respects, they can be trouble if they fall too far and hurt corporate profits, leading to further economic weakness. Japan, the world's second-largest economy, has struggled with deflation for much of the past decade.

Federal Reserve policy makers, including Chairman Alan Greenspan, doubt the U.S. economy is anywhere near deflation; nevertheless, they have promised to be vigilant against it, keeping short-term interest rates lower for longer.

Much of the gain in June CPI was driven by a 0.4 percent jump in food prices, along with a 0.8 percent jump in energy prices, the biggest gain since March.

Clothing prices rose 0.4-percent, their first gain since 0.8 percent in August 2002.

Medical costs rose 0.3 percent and have gained 4.1 percent in the past 12 months, making them the second-strongest CPI component after energy prices, which have risen 9.3 percent in the past year.