Washington — US consumer prices rebounded less than expected in April as rising costs for petrol and rental accommodation were tempered by a moderation in healthcare prices, pointing to a steady build-up of inflation.
The US labour department said on Thursday that its consumer price index (CPI) rose 0.2% after slipping 0.1% in March. In the 12 months to end-April, the CPI increased 2.5%, the biggest gain since February 2017, after rising 2.4% in March.
Excluding the volatile food and energy components, the CPI edged up 0.1% after two straight monthly increases of 0.2%. The so-called core CPI rose 2.1% year-on-year in April, matching March’s increase.
Economists had forecast the CPI rebounding 0.3% in April and the core CPI climbing 0.2%. The US Federal Reserve tracks a different inflation measure, which is now flirting with the Fed’s 2% target. The personal consumption expenditures price index, excluding food and energy, accelerated to 1.9% year-on-year in March as last year’s big declines in the price of cellphone service plans dropped out of the calculation.
Economists expect the core personal consumption expenditure (PCE) price index, which had increased 1.6% in February, to breach its target in May.
Petrol prices rebounded 3% in April after tumbling 4.9% in March.
Further increases are likely after crude oil prices jumped to three-and-a-half-year highs on Wednesday in the wake of US President Donald Trump’s decision to pull the US out of an international nuclear deal with Iran.
Food prices rose 0.3% last month after nudging up 0.1% in March. Food consumed at home increased 0.3%, the biggest gain since March 2017.
Owners’ equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, rose 0.3% last month after a similar gain in March.
Healthcare costs nudged up 0.1% after advancing 0.4% in March, helping restrain the increase in the core CPI. Prices for used cars and trucks tumbled 1.6% in April, the largest drop since March 2009.
The cost of recreation fell 0.4% last month, the biggest decline since December 2009. Apparel prices rose 0.3% in April after falling 0.6% in the prior month.