Consumer prices rose sharply in April, driven by rising energy prices and increases in prices for housing, furniture, airfare, and clothing.
The consumer price index rose 0.6 percent in April, the Department of Labor said Tuesday. Compared with a year ago, prices are up 3.8 percent. This matched expectations.
Core prices, a measure that excludes volatile food and energy prices, rose 0.4 percent compared with the previous month. For the year, core prices are up 2.8 percent. That compares with expectations of 0.3 percent for the month and 2.7 percent for the year.
The month-to-month increase showed inflation slowing from the jump in March, when the oil price shock first hit following the launch of the war with Iran. The previous month saw the CPI rise 0.9 percent, for a year-over-year increase of 3.3 percent. Core prices climbed 0.2 percent in March and were up 2.6 percent from a year ago.
The Federal Reserve targets two percent annual inflation but uses a different gauge, the personal consumption expenditure price index compiled by the Department of Commerce, as its preferred measure of consumer prices. In recent months, the annual pace of PCE inflation has run slightly above the better-known consumer price index published by the Labor Department.
Energy prices drove the increase in the headline figure, rising 3.8 percent in the month and accounting for over 40 percent of the overall rise, according to the Labor Department. These have been rising rapidly since the start of the U.S. war with Iran and the closure of the Strait of Hormuz. Despite peace negotiations and a cease-fire, oil prices have remained high, and gasoline prices continue to rise. Brent crude, the global benchmark for oil, was recently trading at $107 a barrel, up from $62 in mid-February. The national average for gasoline hit $4.50 a gallon yesterday, up from $2.92 in mid-February.
Prices for gasoline are much higher in California, which heavily taxes gasoline and is the only region in the country dependent on oil that ordinarily passes through the Strait of Hormuz. Climate change activists have for years stymied efforts to build pipelines that could bring oil from the American Midwest to the West Coast.
Gasoline prices rose 5.4 percent in April, according to the CPI. Electricity prices climbed 2.1 percent. Piped natural gas prices fell 0.1 percent despite an increase in the global prices for natural gas.
At the grocery store, prices keep rising. Prices climbed 0.7 percent in April and are up 22.9 percent from April of last yera. Beef prices rose 2.7 percent in April and they are up 14.8 percent from a year ago. Bread prices jumped 0.9 percent. Cereals rose 0.7 percent. Milk prices rose 1.6 percent but are up just 0.5 percent from a year ago because of previous declines. Fruit and vegetable prices rose 1.8 percent, bringing the year-over-year increase up to 6.1 percent.
Chicken prices, however, declined for the month and are down 0.7 percent from a year ago.
Outside of food and energy, many prices rose at an accelerated rate. Excluding energy, prices climbed 0.4 percent. The shelter index—which includes rents, hotel and motel prices, and an equivalent measure for homeowners—rose 0.6 percent in April. Rents and the homeowner equivalent of rent climbed 0.5 percent. Household furnishing prices rose 0.7 percent, a bigger increase from March’s 0.2 percent.
The airline fares index rose 2.8 percent in April, likely driven by higher fuel prices. The personal care index rose 0.7 percent. The index for apparel rose 0.6 percent.
New cars and trucks saw prices decline 0.2 percent. Used car and truck prices were unchanged with the prior month. The index for communications products also fell 0.2 percent.
Prices of durable goods fell 0.1 percent, likely a sign that higher gasoline prices are dampening household spending power for other products. Recreation prices rose 0.1 percent. Medical care prices dropped 0.1 percent, the second consecutive monthly decline.
