Strong core price growth keeps CPI edging higher in April
WASHINGTON (5/26/15)--Consumer prices aren’t breaking any records, but after rising in April, they have posted three straight monthly increases, according to the Bureau of Labor Statistics.
The core price index (CPI) climbed 0.1% during the month, a slightly weaker reading than the previous month’s 0.2% increase.
But core prices--stripping energy and food prices from the headline index--rose 0.3%, the best monthly performance in months (Economy.com May 22).
“The core CPI rose 1.8% on a year-ago basis, the same as it did last month,” said Sohini Chowdhury, Moody’s analyst (Economy.com). “Although this is still lower than the Federal Reserve’s 2% inflation target to justify raising interest rates, we still believe that the rate liftoff will occur at the September [Federal Open Market Committee] meeting.”
The energy index dropped by 1.3% in April, weighing down the headline CPI, while food prices were unchanged after falling 0.2% in March.
Shelter, medical care, household furnishings, used cars and trucks, and new vehicles helped fuel the increase in core CPI, while apparel and airline fares pushed it down.
“The core CPI continues to show a surprising pickup so far this year,” said Jim O’Sullivan, High Frequency Economics chief U.S. economist (MarketWatch May 22).