Annual US Inflation Highest in 14 Months As Consumer Prices Rise 0.2% in April

U.S. consumer prices bounced in April after falling in March for the first time in 10 months, while inflation over the past 12 months increased the most in over a year, according to government figures released Thursday, May 10, 2018.

There were pricing declines in a few areas, like new and used vehicles, but those were offset by higher prices for items like gasoline, food, clothing and shelter. 

Consumer prices in April rose 0.2% after decreasing 0.1% in March, the Labor Department said in its monthly report on the Consumer Price Index. The CPI measures what Americans pay for everything from eggs to energy.

In two key areas:

  • Prices at the pump rose 3% last month after plunging 4.9% in March and falling 0.9% in February. They jumped 13.4% from April 2017. The broader index for energy, which combines items like gasoline, electricity and fuel oil, advanced 1.4% in April after falling 2.8% previously. The Labor Department’s report shows it increased year-over-year by 7.9%.

  • Food prices increased 0.3% in April — the most in more than a year — after rising 0.1% in March. They posted a 1.4% increase over the past 12 months.

Stripping the more volatile food and energy components, so-called core consumer prices rose 0.1% after rising 0.2% in each of the two previous months.

"The indexes for household furnishings and operations, personal care, tobacco, medical care, and apparel all increased in April, while those for used cars and trucks, new vehicles, recreation, and airline fares all declined," the report said.

Shelter or housing costs grew 0.3% after climbing 0.4%. The index rose 3.4% year-on-year. Components of shelter include pricing items like rent for apartments, rental equivalence, lodging away from home such as hotels, and housing at schools. The index accounts for about one-third of the entire CPI.

U.S. inflation advanced 2.5% in the 12 months ending April compared to a 2.4% increase previously. The headline year-over-year figure marks the quickest inflation pace since February 2017 and, the report notes, has trended upward since it was 1.6% — the average annual rate over the past 10 years — for the period ending June 2017.

Core inflation grew 2.1% from a year earlier, for a second straight time and to match the largest 12-month increase since the period ended February 2017. Before then, the 12-month reading had held at either 1.7% or 1.8% for ten consecutive months. The core annual measure is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set its key interest rate.

"This is a pretty soft print with a number of large declines," Bloomberg News quoted Omair Sharif, a senior U.S. economist at Societe Generale. "There’s no broad-based gain in inflation. It argues for the Fed sticking with the three-rate-hike type of plan."

The following table of key inflation figures is for the last seven months through April, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi). To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.

October to May 2018 Consumer Prices – Gains & Losses in Percent

  Oct 2017 Nov 2017 Dec 2017 Jan 2018 Mar 2018 Apr 2018 May 2018 12 Month
All items 0.1 0.3 0.2 0.5 0.2 -0.1 0.2 2.5
  Food 0.1 .0 0.2 0.2 .0 0.1 0.3 1.4
    Food at home 0.1 -0.1 0.2 0.1 -0.2 0.1 0.3 0.5
    Food away from home 0.1 0.2 0.2 0.4 0.2 0.1 0.2 2.5
  Energy -1.4 3.2 -0.2 3.0 0.1 -2.8 1.4 7.9
    Energy commodities -3.0 5.8 -0.7 5.8 -0.9 -4.7 3.0 13.7
      Gasoline (all types) -3.2 6.0 -0.8 5.7 -0.9 -4.9 3.0 13.4
      Fuel oil 1.4 5.6 0.9 9.5 -3.6 -0.7 2.7 22.6
    Energy services 0.4 0.5 0.4 -0.8 1.4 -0.2 -0.5 1.2
      Electricity 0.4 0.5 0.2 -0.2 0.4 .0 -0.6 1.2
      Utility (piped) gas service 0.4 0.7 1.0 -2.6 4.7 -1.2 -0.4 1.0
  All items less food, energy 0.2 0.1 0.2 0.3 0.2 0.2 0.1 2.1
    Commodities less food, energy .0 -0.1 0.2 0.4 0.1 -0.1 -0.1 -0.4
      New vehicles -0.2 0.2 0.5 -0.1 -0.5 .0 -0.5 -1.6
      Used cars and trucks 0.7 0.5 0.7 0.4 -0.3 -0.3 -1.6 -0.9
      Apparel -0.2 -0.9 -0.3 1.7 1.5 -0.6 0.3 0.8
      Medical care .0 0.5 0.9 -0.1 -0.3 0.1 -0.2 1.9
    Services less energy 0.3 0.2 0.3 0.3 0.2 0.3 0.2 2.9
      Shelter 0.3 0.2 0.3 0.2 0.2 0.4 0.3 3.4
      Transportation 0.4 0.1 0.3 0.8 1.0 0.2 -0.4 4.1
      Medical care 0.3 -0.1 0.2 0.6 .0 0.5 0.2 2.2

 

The BLS releases inflation data around the middle of every month based on consumer prices surveyed in the previous month. The Consumer Price Index (CPI) for April and the latest annual period become public on June 12, 2018.

CPI data is used in calculating inflation rates and in this site’s inflation calculator. The US Inflation Calculator shows cumulative inflation and the change in buying power of the U.S. dollar over time.

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