US Consumer Prices Rebound 0.2% In April

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2018-05-10 HKT 21:27

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  • Rising gasoline prices have contributed to the rebound in the US Consumer Price Index. Photo: AP

    Rising gasoline prices have contributed to the rebound in the US Consumer Price Index. Photo: AP

US consumer prices rebounded in April after dipping in March, driven by a surge in gasoline prices and an uptick in housing costs, the Labor Department reported on Thursday.

Food prices also rose, as did medical services, but cell phone services - which had been blamed for the bafflingly low inflation last year - were flat after finally rising in March.

The Consumer Price Index, which tracks costs for household goods and services, rose 0.2 percent compared to March, seasonally adjusted. CPI was up 2.5 percent from April 2017, putting it a half point above the Federal Reserve's inflation target.

The monthly increase was pushed by a three percent jump in gasoline prices last month, which recouped a large part of the 4.9 percent decline posted in March, the report showed.

Shelter costs were up a more modest 0.3 percent, but that category has a much bigger impact on the headline CPI number and has been trending up in recent months.

Food prices also rose 0.3 percent in the month.

However, excluding the volatile food and energy components, "core" CPI rose just 0.1 percent and was 2.1 percent higher than the same month of last year.

The CPI results were weaker than analysts had been expecting.

But for the first four months of the year, CPI is running at a 2.6 percent seasonally adjusted annual rate, while core is 2.4 percent, both a full point higher than at this point in 2017, according to Labor Department calculations.

Meanwhile, wage data showed hourly earnings, adjusted for inflation, were flat in the month.

Fed policymakers closely watch wage and price data to decide when to raise interest rates, although they focus on a different inflation indicator, the Personal Consumption Expenditures price index.

But the CPI remains an important benchmark and the April price data could calm Wall Street, which has been on edge about the possibility the Fed could raise interest rates more aggressively.

They might possibly be cheered by one data point in the CPI report: the cost of whiskey at home fell 0.3 percent in April. (AFP)