(Updates with CPI)

July 11 (Reuters) - The U.S. Federal Reserve held its

benchmark overnight interest rate steady in the 5.25%-5.50%

range at the conclusion of its June 11-12 policy meeting.

U.S. central bank officials remain uncertain about the

timing of a first rate cut and say they want to see more data

confirming that inflation will fall, even if slowly.

Among the key statistics they are watching:

INFLATION (CPI released July 11; next release PCE July 26):

Consumer prices fell in June by 0.1%, with drops in both

volatile energy items and core consumer goods like vehicles, and

weakness in housing costs that Fed officials have long been

waiting to see. The 0.2% rise in shelter prices was the slowest

since August of 2021, just as home prices and rents were

beginning a pandemic-era rise.

The data pushed the annual rise in consumer prices down

to 3% from 3.3% the month before, with the more volatile core

index, excluding food and energy, falling to 3.3% from 3.4%.

Actual declines in the inflation index are not common,

and the outcome - the weakest CPI print since May of 2020 -

could build the case for the Federal Reserve to cut rates.

Traders boosted bets on a September rate reduction to more than

80%.

The separate personal consumption expenditures price index,

used by the Fed to set its 2% inflation target, has also been

easing. It fell in May to a 2.6% annual rate, from 2.7% in the

prior month.

Core PCE prices, stripped of volatile food and energy costs,

dropped to 2.6% in May from 2.8% in April.

On a month-to-month basis, the PCE index was flat, and

officials have begun to pay closer attention to signs of

weakening demand in the economy as a precursor to a slowed pace

of price increases.

EMPLOYMENT (Released July 5; next release August 2):

U.S. firms added a greater-than-expected 206,000 jobs in

June, but revisions to the prior two months knocked 111,000

positions from the previously estimated number of payroll jobs.

That pushed the three-month average total payroll growth down to

177,000, below the level typical before the pandemic and a

development likely to be taken by the Federal Reserve as further

evidence the job market is slowing.

The unemployment rate rose slightly to 4.1%, the highest

since Nov. 2021.

Fed officials have become more comfortable with the idea

that continued job growth could still allow inflation to fall,

especially if the supply of labor keeps growing and wage growth

eases - as it did in June.

The number of people in a job or looking for work grew, and

fewer people dropped out of the labor force - both healthy signs

that nevertheless pushed up the unemployment rate. Average

hourly wages meanwhile rose 3.9% compared to a year ago, versus

a 4.1% annual increase in May. The Fed generally considers wage

growth in the range of 3.0%-3.5% as consistent with its 2%

inflation target.

JOB OPENINGS (Released July 2; next release July 30):

In a sign of the job market's continued strength, the level

of job openings rose slightly in May, while the number of open

jobs available for each unemployed person remained around 1.22,

near where it was in the years before the COVID-19 pandemic.

Fed Chair Jerome Powell has kept a close eye on the U.S.

Labor Department's Job Openings and Labor Turnover Survey

(JOLTS) for information on the imbalance between labor supply

and demand, and the pandemic-era jump to more than 2 to 1 in the

number of open jobs for each available worker was emblematic of

the time.

Things have cooled substantially. Other aspects of the

survey, like the quits rate - unchanged at 2.2 since November -

have edged back to pre-pandemic levels in what Fed officials

view as an emerging balance between the supply and demand for

workers.