Washington - The Labor Department says its measure of inflation at the retail level edged up a seasonally adjusted 0.2% in April after an unchanged performance in March.
Most economists on Wall Street were expecting the all-urban Consumer Price Index to rise a modest 0.2% for the month.
Despite widespread expectations, gasoline prices continued to decline, but tobacco prices, housing costs and medical care helped push the so-called core rate, which excludes food and energy, up 0.3% in the month.
Labor said the increase in consumer-level inflation was the strongest since October.
Exluding food and energy, the rise in the core CPI was also faster than the 0.1% pace recorded in March.
Labor said service prices, which comprise about 57% of the overall CPI, where up 2.7% in April from a year ago level.
However, commodity prices, which make up 43% of the report, were down 0.2% from a year ago.
Labor said energy prices declined 0.1% in April and gasoline prices fell 1% _ their biggest decline since October.
Food prices inched up 0.1% as the cost of fresh fruits jumped 0.9% and vegetables dipped 0.1%. Beef prices rose 0.2%.
Tobacco prices surged 3.8% _ their biggest increase since October 1982, when they rose 4.2%.
The CPI report came just one day after Labor reported inflation at the wholesale level edged up a seasonally adjusted 0.2% in April, the first increase in seven months.
The latest reading on inflation also came just five days before the Federal Reserve's Open Market Committee meets behind closed doors to discuss monetary policy.
Allen Sinai, economist at Primark Decision Economics said “the risk of a Fed tightening must be assessed at 40%, given last week's low 4.3% unemployment rate.
“The rate is so low that the risk of an associated pickup of wage and price inflation has to be greater than before,” Sinai added.
The last time the Fed changed monetary policy was March 25, 1997, when it lifted the Federal Funds rate by one-quarter percentage point to the current 5.50%.
The last time the central bank lowered U.S. interest rates was back on Jan. 31, 1996, when it cut the discount rate by one-quarter percentage point to its current 5% and Fed Funds rate by one- quarter point to 5.25%.
Meat Industry Insights News Service
P.O. Box 553
Northport, NY 11768
Phone: 631-757-4010
Fax: 631-757-4060
E-mail: sflanagan@sprintmail.com
Return to Home Page