April CPI At 0.4%, In Line With Expectations, Core Up 0.2%, Gasoline Accounts For Half Of Price Increase

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April consumer inflation rose 0.4% in April, in line with expectations, and 3.2% year over year. This is a modest drop in the monthly increase from 0.5% in March, while the Y/Y number was an increase from 2.7% to 3.2%. The energy index posted another increase in April as the gasoline index continued to rise, the latter accounting for almost half of the seasonally adjusted all items increase. For those who eat in addition to use energy, the BLS had this to say: "The food index increased as well in April, though the 0.5 percent rise in the food at home index was the smallest increase this year." Still: "Within the food at home component, the indexes for meats, poultry, fish, and eggs, for dairy and related products, and for nonalcoholic beverages all posted notable increases, though the fresh vegetables index did decline following recent advances." Core CPI rose for 0.2%: the third such increase in 4 months. Overall, CPI continues to be far less than indicated by the MIT BPP.

From the report:

Food

The food index rose 0.4 percent in April after rising 0.8 percent in March. The food at home index, up 1.1 percent in March, rose 0.5 percent in April. The deceleration was mainly due to the fresh vegetables index, which turned down in April, falling 2.7 percent after posting large increases in each of the previous two months. This led to the fruits and vegetables index declining 1.1 percent, the only major grocery store food group to decline in April. In contrast to this decline, the index for dairy and related products rose 1.7 percent, the index for nonalcoholic beverages advanced 1.2 percent, and the index for meats, poultry, fish, and eggs increased 1.1 percent. The indexes for cereals and bakery products and for other food at home posted smaller increases. The food at home index has risen 3.9 percent over the last 12 months, with all major grocery store food groups increasing over the period. The index for food away from home rose 0.3 percent in April, the same increase as in March.

Energy

The energy index rose 2.2 percent in April. This is the tenth increase in a row and follows advances of 3.5 percent in March and 3.4 percent in February. The gasoline index rose 3.3 percent in April after a 5.6 percent increase in March. (Before seasonal adjustment, gasoline prices rose 7.5 percent in April.) The index for household energy also increased in April, rising 0.7 percent. The fuel oil index rose 3.2 percent, continuing a strong upward trend, while the index for electricity increased 0.2 percent. The index for natural gas, which declined in March, rose 1.9 percent in April. The household energy index has risen 1.9 percent over the last 12 months, with the fuel oil index up 35.1 percent and the electricity index up 0.6 percent but the index for natural gas down 1.5 percent.