On a seasonally adjusted basis, the CPI-U advanced 0.4 percent in April, following a 0.6 percent increase in March. The index for energy increased 2.4 percent after advancing 5.9 percent in March. In April, the index for petroleum-based energy rose 4.6 percent versus a 10.1 percent increase in March. The food index rose 0.4 percent in April, slightly more than in March. The index for all items less food and energy advanced 0.2 percent in April, following a 0.1 percent rise in March; the index for shelter rose 0.3 percent after advancing 0.1 percent in March, resulting from an upturn in the index for lodging away from home.
From Bloomberg:
The consumer price index increased 0.4 percent after rising 0.6 percent in March, the Labor Department said today in Washington. Core prices, which exclude food and energy, were up 0.2 percent after a 0.1 percent gain.
Core prices in the 12 months ended in April were up 2.3 percent, the smallest gain in year, a sign surging fuel costs aren't filtering through the economy. The report may reassure Federal Reserve policy makers, who are counting on slower growth to stem inflation.
``It is now becoming more apparent that core inflation has peaked and is moving lower in response to anemic economic activity,'' Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc., said before the report.
Economists forecast consumer prices would rise 0.5 percent, according to the median of 80 projections in a Bloomberg News survey. Estimates ranged from increases of 0.2 percent to 0.8 percent. Core prices were projected to rise 0.2 percent, according to the survey median.
The 12-month figure for total inflation (for those few of you who actually buy food and gas) came in at 2.6%. This is still above the Fed's preferred comfort zone of 1%-2%, so it's doubtful we'll see a rate cut anytime soon.
This is a good report because it didn't shock to the upside. However, it wasn't so good to warrant speculation the Fed will lower rates anytime soon.
Thanks to NDD in the comments for bringing the following information to my attention.
The BLS report has a chart that shows the seasonally adjusted annual percent change in the overall inflation level for a variety of time periods. For the three months ending 07/06, 10/06, 01/07 and 04/07 we get the following numbers, respectively: 4.9% -2.7%, 2.7% and 5.7%. For the six months ended 10/06 and 04/07 we get the following numbers: 1.0%, 4.2%. In other words, inflation is acceleration over the latest three and six month measures of inflation.
