USA consumer prices rebound less than expected in April

USA consumer prices rebound less than expected in April

It was the second month in a row with annual core inflation above 2.0%, the Federal Reserve's unofficial target for US inflation.

The Labor Department said its Consumer Price Index rose 0.2 percent in April as increases in the cost of gasoline and rents were tempered by a drop in motor vehicle prices. In the 12 months to end-April, the CPI increased 2.5%, the biggest gain since February 2017, after rising 2.4% in March.

Excluding the volatile food and energy components, the CPI edged up 0.1 percent after two successive monthly increases of 0.2 percent.

Prices for all items less food and energy, the "core CPI", grew 0.1% in April, following a 0.2% March increase.

USA consumer prices rose by less than forecast in April as costs for automobiles and airfares declined, reducing chances that inflation will run significantly above the Federal Reserve's target in coming months.

In their policy statement last week, Fed officials said they expected annual inflation to run close to the "symmetric" 2 per cent target over the medium term. Other gauges broadly show stronger inflation in the U.S. The Commerce Department said last week its price index for personal-consumption expenditures was up 2% from a year earlier in March.

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Last month's slowdown in wholesale price growth is likely temporary as manufacturers have been reporting paying more for raw materials. Gasoline prices led the increase, growing 3.0%.

Further increases are likely after crude oil prices jumped to 3-1/2-year highs on Wednesday in the wake of President Donald Trump's decision on Tuesday to pull the United States out of an worldwide nuclear deal with Iran. Over the last 12 months, "headline inflation" rose 2.5%. Food consumed at home increased 0.3%, the biggest gain since March 2017. Prices for both food at home grew 0.3%, while food away from home rose 0.2%.

The April number was below the consensus estimate of 0.3% and followed a decline of 0.1% in March. Prices for used cars and trucks tumbled 1.6% in April, the largest drop since March 2009.

U.S. West Texas Intermediate crude futures were last up just 0.04 percent at $71.18.

Apparel prices rose 0.3 per cent in April after falling 0.6 per cent in the prior month. The dollar fell after the report suggested inflation isn't flaring up in a way that would be troublesome for policymakers, despite higher freight costs, a 17-year low in the unemployment rate and tariffs that are burdening businesses.

This story has not been edited by Firstpost staff and is generated by auto-feed.

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