US consumer prices rebound 0.2 pct in April on jump in gasoline

WASHINGTON: US consumer prices rebounded in April after dipping in March, driven by a surge in gasoline prices and an uptick in housing costs, but the Labor Department report was tamer than expected.

Food prices also rose, as did medical services, but cell phone services – which had been blamed for the bafflingly low inflation last year – were flat after finally rising in March.

The Consumer Price Index, which tracks costs for household goods and services, rose 0.2 per cent compared to March, seasonally adjusted.

And the index was up 2.5 per cent from April 2017, continuing its rising trend and putting it a half point above the Federal Reserve’s inflation target.

Analysts say the details of the report are fairly benign, cheering Wall Street which posted solid gains since the data was viewed as reducing odds the Federal Reserve will need to raise interest rates more aggressively.

The CPI rebound was pushed by a three per cent jump in gasoline prices last month, which recouped a large part of the 4.9 per cent decline posted in March, the report showed.

Shelter costs – which include rent and an equivalent measure for homeowners – were up a more modest 0.3 per cent, but that category has a much bigger impact on the headline CPI number and has been trending up in recent months.

Food prices also rose 0.3 per cent in the month.

However, excluding the volatile food and energy components, “core” CPI rose just 0.1 per cent and was 2.1 per cent higher than the same month of last year.

The CPI results were weaker than analysts had been expecting.

“There’s even more good news in this report than suggested by the surprise relief in the core,” Chris Low of FTN Financial said.

“Goods prices are falling outright and there are declines throughout services.”

He said if not for the ownersequivalent rent component, “a flaky series if there ever was one – the core would have fallen.”

And Mickey Levy of Berenberg Capital said the price trend is stabilising, which “should quell concerns for now about a widespread and sustained heating-up of inflation.” — AFP