NEW YORK, July 14 (Reuters) - U.S. Treasury yields dropped on Friday after data showed U.S. inflation in June was unchanged from the previous month and retail sales unexpectedly weakened, further fueling doubts about an interest rate increase later this year.
The unchanged consumer price reading for June followed a 0.1 percent dip in May. The so-called core CPI, which strips out food and energy costs, edged up 0.1 percent in June. The core CPI increased 1.7 percent year-on-year after a similar gain in May.
U.S. retail sales also underperformed, falling for a second straight month in June. Retail sales dropped 0.2 percent last month.
In early trading, U.S. 10-year yield fell to 2.308 percent , from 2.331 percent before the data.
U.S. two-year yields slid as well, down at 1.343 percent , from 1.355 percent before the data's release.
Reporting by Gertrude Chavez-Dreyfuss; Editing by Chizu Nomiyama