Consumer prices in the U.S. increased by slightly less than expected in the month of April, the Labor Department revealed in a report released on Thursday.
The Labor Department said its consumer price index rose by 0.2 percent in April after edging down by 0.1 percent in March. Economists had expected consumer prices to climb by 0.3 percent.
The modest increase in consumer prices was partly due to a rebound in energy prices, which surged up by 1.4 percent in April after plunging by 2.8 percent in March.
Gasoline prices jumped by 3.0 percent during the month, more than offsetting decreases in prices for electricity and natural gas.
Excluding food and energy prices, core consumer prices inched up by 0.1 percent in April after rising by 0.2 percent in the previous month. Core prices had been expected to rise by 0.2 percent.
The uptick in core consumer prices was partly due to a continued increase by the shelter index, which rose by 0.3 percent in April after climbing by 0.4 percent in March.
Prices for household furnishings and operations, personal care, tobacco, medical care, and apparel also increased, while prices for used cars and trucks, new vehicles, recreation, and airline fares declined.
Michael Pearce, Senior U.S. Economist at Capital Economics, said the smaller than expected increase in core prices suggests that the recent surge in underlying inflation is fading.
“Even so, core inflation on the Fed’s preferred PCE measure has still accelerated faster than Fed officials anticipated just a few months ago, which will keep the Fed on track to raise interest rates again in June,” Pearce said.
Compared to the same month a year ago, consumer prices were up 2.5 percent in April, reflecting an acceleration from the 2.4 percent growth in March.
The annual rate of growth for core consumer prices in April was unchanged from the previous month at 2.1 percent.
A separate report released by the Labor Department on Wednesday showed a modest uptick in producer prices in the month of April.
The Labor Department said its producer price index for final demand inched up by 0.1 percent in April after rising by 0.3 percent in March. Economists had expected prices to edge up by 0.2 percent.
Core producer prices rose by 0.2 percent in April after climbing by 0.3 percent in the previous month. The increase in core prices matched economist estimates.