Consumer prices fell more than expected in June to post their largest drop in a year, but inflation pressures remain elevated, Reuters reported.

The Consumer Price Index (CPI) fell 0.2 percent, which was the biggest decline since June 2010, according to the Labor Department. Economists had expected prices to fall 0.1 percent, after rising 0.2 percent in May.

Not including food and energy, the core Consumer Price Index rose 0.3 percent after a similar gain in May. In the 12 months to April, the core CPI rose 1.6 percent. The government would like to see that closer to 2 percent.

“We are getting a very, very sharp rebound in core inflation and much more than the Fed had bargained for,” said Eric Green, chief economist at TD Securities in New York. “We will be at price stability and possibly through it before the end of this year.”

Driven by high energy and food prices, inflation pressures undermined economic activity in the first quarter. Growth slowed sharply to a 1.9 percent annual rate after a vigorous 3.1 percent expansion in the fourth quarter of 2010.

Gasoline prices dropped 6.8 percent in June, the largest decline since December 2008, Food prices rose 0.2 percent after posting a 0.4 percent increase in May.

Overall, consumer prices were up 3.6 percent in June, compared with a year earlier.