May 27, 2024

U.S. Inflation Jumps as Gas and Food Prices Rise

The Labor Department said in its monthly report that the Consumer Price Index, the most widely used measure of inflation, was up 0.4 percent in April from March, and up 3.2 percent from a year earlier. The 12-month figure represents the biggest jump in the index in any 12-month period since October 2008.

Analysts had forecast the same monthly rise but a slightly smaller increase for the year, at 3.1 percent.

Food and gasoline price rises accounted for most of the increases, with gasoline accounting for almost half of the month-to-month rise.

Food prices were up 0.4 percent in April, smaller than the 0.8 percent rise in March as prices for fresh vegetables slowed their advance. Energy prices rose 2.2 percent in April, the 10th consecutive monthly increase, although the rise was smaller than the jumps of 3.5 percent in March and 3.4 percent in February, the report said.

Gasoline prices were up 3.3 percent in April. According to the report, energy prices have now risen 19 percent over the last 12 months, with gasoline prices up 33.1 percent.

Consumers are “painfully aware” that if high energy and food costs continue, “the cost of living is going to go up,” said Stuart Hoffman, the chief economist at the PNC Financial Services Group.

Inflation as measured by the core C.P.I., which strips out volatile prices for energy and food, edged up 0.2 percent in April, making it the third increase of that size in the last four months, the department’s Bureau of Labor Statistics said.

Housing and apparel prices each climbed by 0.2 percent, the figures showed.

Core inflation was up 1.3 percent from a year earlier, the department said. The core index, which was also in line with analysts’ forecasts, was also pushed up by rises in the prices of new vehicles, shelter, medical care and airline tickets.

“I think that you are seeing inflation drift higher,” said Joshua Shapiro, chief United States economist at MFR Inc. “On the core side it is a slow drift, but it is nonetheless there. What will be important to the Fed is the mix between inflation and real growth.”

Many economists expect gasoline prices to ease over the summer. But in some regions of the country, consumers have been paying $4 or more a gallon at the pump since demand in emerging markets and turmoil in the Middle East and North Africa in the first quarter of the year sent prices higher. While consumers are feeling the strain, economists emphasized that the Federal Reserve was unlikely to take any action to relieve it by lowering interest rates or extending its quantitative easing program.

The Fed has raised its forecast of inflation, projecting that prices could rise 2.1 to 2.8 percent this year, mostly because of higher oil prices, although it stressed that those increases would subside. In April, the Fed’s policy-making body voted to continue several stimulus policies, like keeping short-term interest rates near zero. In a statement, the committee said it expected inflation from higher prices in energy and other commodities to be “transitory.”

Mr. Hoffman said core inflation, which is the rate the Fed focuses on, had edged up in the last year, meaning the Fed could put deflation concerns behind it. The 1.3 percent rate in the latest report was still below the unofficial target of the central bank of 2 percent or less.

“It is still not of concern to the Fed,” Mr. Hoffman said. “We are sort of in the middle, not going up too fast to worry the Fed about inflation.”

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