Consumer prices likely rose in July as oil and gas costs increased and damaged overseas crops pushed food prices higher.

Economists surveyed by Thomson Reuters forecast the Consumer Price Index, the government's most closely watched inflation barometer, increased 0.2 percent in July over the previous month.

That would reverse three straight months of declines.

Consumer prices are also projected to increase 1.2 percent compared to a year ago, economists predict. The report is scheduled to be released by the Labor Department on Friday at 8:30 a.m. EDT.

Excluding volatile food and energy costs, so-called "core" consumer prices are projected to tick up 0.1 percent in July. Core prices are likely to rise 0.9 percent over the previous year for the fourth straight month. That's below the Fed's inflation target, and it means core inflation is at a 44-year low.

The three straight months of declines in the consumer price index have raised concerns among some Federal Reserve officials and private economists about deflation. Deflation is a widespread and prolonged drop in the price of goods, real estate, stocks, and wages. The United States' last serious case of deflation was during the Great Depression.

Most economists don't believe deflation will happen. But they are watching consumer prices closely for any signs of it.

Low inflation, meanwhile, is one benefit of the recession. Consumers are spending cautiously and saving more, making it difficult for companies to raise prices.

Tame inflation also allows the Federal Reserve to keep the key interest rate it controls at a record low of nearly zero percent in an effort to bolster economic growth. The Fed usually fights rising inflation by raising rates.

Higher energy costs are likely to have boosted consumer prices last month. Oil rose to almost $79 a barrel at the end of July from just below $73 a barrel at the beginning of the month. Oil prices have since slipped to $75.74 on growing concerns that global economic growth is slowing.

Gas prices averaged $2.776 a gallon on Thursday, up about a penny from the previous week, according to AAA, Wright Express and Oil Price Information Service. That's also about 5 cents higher than the price in mid-July.

Food prices likely rose as the cost of wheat and other grains soared after Russia said last week it was cutting off exports of wheat, barley, rye and corn. A severe drought in that country has destroyed one-fifth of the country's wheat crop. That sent wheat prices to two-year highs last week.