The Economy

Consumer Prices Rise Slightly in April

The latest price index data may leave the Fed with 'less scope to delay raising interest rates.'
Katie Kuehner-HebertMay 22, 2015
Consumer Prices Rise Slightly in April

The Consumer Price Index rose 0.1% in April on a seasonally adjusted basis, after increasing 0.2% in March, the U.S. Department of Labor said Friday.

The all items index fell 0.2% for the 12 months ending April, a slightly larger downtick than the 0.1% decline for the 12 months ending March, according to the DoL’s latest Consumer Price Index Summary. The decline was driven by the energy index, which fell 19.4% over the last 12 months, with all the major components declining except electricity.

The food index rose 2.0% over the last year, and the index for all items less food and energy rose 1.8%.

“This leaves the Fed with less scope to delay raising rates until it sees more evidence of a rebound in real activity,” Capital Economics chief economist Paul Ashworth told Reuters. “September is still the most likely [rate] lift-off date, but July is not out of the question, particularly not if we get another couple of robust rises in core consumer prices in May and June.”

The index for all items less food and energy rose 0.3% in April and led to the slight increase in the seasonally adjusted all items index, the Labor Department said. The index for shelter rose, as did the indexes for medical care, household furnishings and operations, used cars and trucks, and new vehicles. In contrast, the indexes for apparel and airline fares declined in April.

The energy index also declined, while the food index was unchanged. The indexes for gasoline, natural gas, and fuel oil all declined, while the electricity index was unchanged. The food at home index declined for the second month in a row, offsetting an increase in the index for food away from home. Major grocery store food group indexes were mixed.