US Inflation Bounces Back in April; Rate Eases Year-On-Year

U.S. inflation rebounded modestly in April after sliding in March for the first time in more than a year, although the annual rate of inflation eased for a second month in a row, the government reported Friday, May 12.

Drivers for the monthly increase included items like shelter, gasoline, electricity, food and tobacco.

Consumer prices advanced 0.2% in April after falling 0.3% in March, the Labor Department said in its monthly report on the Consumer Price Index. The CPI measures what Americans pay for everything from meat to medical care.

Prices at the pump increased for the first time in three months, up 1.2%. Before the last two monthly declines (3% in February and 6.2% in March), they climbed for six straight months, peaking in January at 7.8%. Gasoline prices have surged 14.3% over the last 12 months.

The broader index for energy, which combines items like gasoline, electricity and fuel oil, rose 1.1% in April after slumping 3.2% in March. Energy prices over the longer 12-month haul grew 9.3%.

After registering flat for sixth consecutive months, food prices picked up for a fourth month in a row, up 0.2%. They are 0.5% higher year-over-year.

Stripping the more volatile food and energy components, so-called core consumer prices rose 0.1% in April after slipping 0.1% in March — their first decrease since January 2010.

Within the grouping, shelter costs rose 0.3% after moving up 0.1% previously — the least since June 2014. They remained 3.5% higher over the past 12 months. Components of shelter include pricing items like rent, rental equivalence, lodging away from home, and housing at school.

"The tobacco index rose 4.2 percent in April, its largest increase since April 2009," the Labor Department said.

Prices for many major items declined, including drops of 0.2% for new vehicles, 0.5% for used cars and trucks, 0.3% for clothing, 0.8% for medical care commodities and 0.2% for transportation services.

U.S. inflation increased 2.2% through the 12 months ended April after climbing 2.4% previously. As recently as February, they jumped 2.7% for their biggest annual rate increase since March 2012.

Core inflation rose 1.9% on an annual basis, the smallest gain since October 2015, following a 2% increase previously. The core annual reading 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.

"To some extent, this new weakness in price inflation is due to competitive pressures rather than weak demand, so the Fed can afford to discount it," RTTNews.com quoted Paul Ashworth, Chief U.S. Economist at Capital Economics.

"But even under those circumstances, it increases the downside risks to our above-consensus view that the Fed will hike interest rates three more times this year," he added.

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) on May 12, 2017. 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 2016 to April 2017 Consumer Prices – Gains & Losses in Percent

  Oct 2016 Nov 2016 Dec 2016 Jan 2017 Feb 2017 Mar 2017 Apr 2017 12 Month
All items 0.3 0.2 0.3 0.6 0.1 -0.3 0.2 2.2
  Food .0 .0 .0 0.1 0.2 0.3 0.2 0.5
    Food at home -0.2 -0.1 -0.2 .0 0.3 0.5 0.2 -0.8
    Food away from home 0.1 0.1 0.2 0.4 0.2 0.2 0.2 2.3
  Energy 2.5 1.0 1.2 4.0 -1.0 -3.2 1.1 9.3
    Energy commodities 4.8 2.0 2.4 7.6 -2.8 -6.0 1.3 14.5
      Gasoline (all types) 5.1 2.1 2.4 7.8 -3.0 -6.2 1.2 14.3
      Fuel oil 5.9 -1.2 6.0 3.5 -0.4 -0.8 -0.3 22.1
    Energy services 0.4 .0 .0 0.3 1.0 -0.3 0.9 4.4
      Electricity 0.3 .0 .0 .0 0.8 -0.1 0.6 2.4
      Utility (piped) gas service 0.9 0.2 0.1 1.5 1.5 -0.8 2.2 12.0
  All items less food, energy 0.1 0.2 0.2 0.3 0.2 -0.1 0.1 1.9
    Commodities less food, energy .0 -0.2 .0 0.4 .0 -0.3 -0.2 -0.6
      New vehicles 0.2 .0 0.1 0.9 -0.2 -0.3 -0.2 0.4
      Used cars and trucks -0.1 0.2 0.2 -0.4 -0.6 -0.9 -0.5 -4.6
      Apparel 0.2 -0.3 -0.4 1.4 0.6 -0.7 -0.3 0.5
      Medical care 0.2 -0.4 0.5 0.3 -0.2 0.2 -0.8 2.6
    Services less energy 0.2 0.3 0.3 0.3 0.3 -0.1 0.1 2.7
      Shelter 0.3 0.3 0.3 0.2 0.3 0.1 0.3 3.5
      Transportation -0.1 0.5 0.5 0.6 0.7 0.4 -0.2 3.1
      Medical care 0.1 0.2 0.2 0.2 0.2 0.1 .0 3.1

 

The BLS releases inflation data around the middle of every month based on consumer prices surveyed through to the previous month. The Consumer Price Index (CPI) for May and the latest annual period becomes public on June 14, 2017.

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

Leave a Reply