US Inflation in April Rises; Annual Inflation Rate Slides

United States inflation in April climbed for a third month in a row as American consumers caught some pricing breaks in clothing, energy and food but paid more for homes and rent, healthcare, transportation and vehicles.

In a tale of opposites, according to government data released Friday, May 22, annual inflation declined by the biggest amount in 5-1/2 years while core consumer prices posted their biggest monthly increase in over 2 years.

Consumer prices edged up 0.1% in April from March, when they rose 0.2% for a second straight month, the US Labor Department showed in its monthly report on the Consumer Price Index (CPI). The CPI measures what Americans pay for everything from cars, to cloths, to airline tickets, to fruits and vegetables.

Gasoline prices fell 1.7% in April after jumping 3.9% in March, and the broader price category for energy declined 1.3% for the month after rising 1.1% previously.

"Consider April the calm before the storm for the energy category," Bloomberg News quoted Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in Stamford, Connecticut. "Gasoline prices are on pace to post a sharp seasonally adjusted rise in May, which could drive energy prices up by 4 percent."

From a year ago, prices at the pump and overall energy costs are down by 31.7% and 19.4%.

Food prices came in unchanged last month after dropping in March for the first time since May 2013. The cost of food is 2% higher than a year earlier, however.

Stripping out energy and food, so-called core consumer prices surged 0.3% in April for the biggest increase since January 2013. They advanced 0.2% in each of the months from January through March.

Within core groupings, April increases were broad-based with:

  • shelter up 0.3%,
  • new vehicles up 0.1%,
  • used cars and truck prices up 0.6%,
  • transportation up 0.1%,
  • medical care commodities up 0.1%, and
  • medical care services up 0.9%.

Clothing fell 0.3%, the first drop since December and after rising 0.5% in March. Alcoholic and tobacco costs were both unchanged in April.

In the longer period, inflation fell 0.2% in the 12 months through April for the biggest decline in inflation rates since October 2009 and after:

  • sliding 0.1% in March,
  • coming in flat in February, and
  • falling 0.1% in January.

January’s decline was also the first 12-month drop since October 2009.

In rounding out the Labor Department’s report, core US inflation advanced 1.8% on a year-over-year basis to match the prior month’s reading, and after gaining 1.7% in the 12 months ending February and 1.6% through January.

This data "will give the Fed greater confidence that inflation will indeed make it to its target in the next couple of years, it increases the odds of faster Fed action," Reuters quoted Chris Rupkey, chief financial economist at MUFG Union Bank in New York."

The core annual level is the benchmark inflation rate monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set the key interest rate. The rate continues to sit under the Fed’s 2% annual inflation target.

"We don’t see much in [the CPI] report that will raise concerns at the Fed that inflation may be picking up faster than expected," the WSJ quoted Collamore Crocker, managing director of global inflation markets at Mesirow Financial. "We still have September as our forecast for the first hike, with risk being a later liftoff, rather than sooner."

Inflation data follows. The table presents monthly and annual percentage changes in the prices of consumer goods and services that are surveyed, analyzed and then summarized by the US Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi).

October 2014 – April 2015 Consumer Prices – Gains & Losses in Percent

  Oct 2014 Nov 2014 Dec 2014 Jan 2015 Feb 2015 Mar 2015 Apr 2015 12 Month
All items 0.1 -0.3 -0.3 -0.7 0.2 0.2 0.1 -0.2
  Food 0.2 0.2 0.2 .0 0.2 -0.2 .0 2.0
    Food at home 0.2 0.1 0.2 -0.2 0.1 -0.5 -0.2 1.3
    Food away from home 0.2 0.4 0.3 0.2 0.3 0.2 0.2 2.9
  Energy -1.2 -4.1 -4.7 -9.7 1.0 1.1 -1.3 -19.4
    Energy commodities -2.1 -7.0 -9.0 -18.0 2.1 3.8 -1.9 -31.2
      Gasoline (all types) -2.0 -7.2 -9.2 -18.7 2.4 3.9 -1.7 -31.7
      Fuel oil -4.0 -3.5 -7.8 -9.9 1.9 5.9 -8.4 -29.1
    Energy services -0.1 -0.3 0.8 -0.1 -0.2 -1.5 -0.5 -1.2
      Electricity 0.5 .0 0.6 0.9 0.3 -1.1 .0 3.8
      Utility (piped) gas service -1.9 -1.3 1.4 -3.4 -2.0 -2.7 -2.6 -16.3
  All items less food, energy 0.2 0.1 0.1 0.2 0.2 0.2 0.3 1.8
    Commodities less food, energy .0 -0.3 -0.2 -0.1 0.2 0.3 0.1 -0.2
      New vehicles 0.1 .0 .0 -0.1 0.2 0.2 0.1 0.8
      Used cars and trucks -0.6 -0.9 -0.8 -0.1 1.0 1.2 0.6 -0.5
      Apparel -0.3 -0.7 -0.8 0.3 0.3 0.5 -0.3 -0.8
      Medical care 0.2 0.6 0.9 -0.3 0.7 0.1 0.1 4.1
    Services less energy 0.2 0.2 0.2 0.3 0.1 0.2 0.3 2.5
      Shelter 0.2 0.2 0.2 0.3 0.2 0.3 0.3 3.0
      Transportation 0.5 0.2 .0 0.4 0.3 .0 0.1 1.6
      Medical care 0.2 0.3 0.3 0.1 -0.2 0.4 0.9 2.6

 

Bureau of Labor Statistic data for inflation in the United States is published once a month. The information looks at consumer prices through to the previous month. Consumer Price Index data with May inflation and through the annual period becomes public on June 18, 2015.

CPI data is used in calculating inflation rates and it is the backbone for this site’s inflation adjuster. The US Inflation Calculator provides accumulated inflation and the change in buying power of the US dollar over time.

2 thoughts on “US Inflation in April Rises; Annual Inflation Rate Slides”

  1. inflation rate is not factual anymore like all of the government issued data who can believe it? Anyone who goes grocery shopping know nothing is the same price is was two months ago. It is no wonder no body in this country trusts the government. Overpaid underworked bureucraps who are not accountable to anyone.

  2. I work in the grocery business and trust me, their hasn’t been any price breaks in food. In fact the price may stay the same on many items but they are continuing to make the packages with fewer and ounces. The inflation calculator is not factoring that type of inflation in. Bcause in actuality your paying more to get the same amount of ounces you were getting before.

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