BLBG: U.S. Consumer Prices Increased 0.4% in April on Gains in Fuel, Food Costs
The cost of living in the U.S. rose in April, led by increases in food and fuel costs that are starting to filter down to other goods and services.
The consumer-price index increased 0.4 percent, matching the median forecast of economists surveyed by Bloomberg News and following a 0.5 percent advance in March, figures from the Labor Department showed today in Washington. Excluding volatile food and energy, the so-called core gauge rose 0.2 percent, also as projected.
Improving job prospects are helping sustain consumer spending even as grocery and energy bills climb, which may make it easier for companies like Colgate-Palmolive Co. (CL) to pass rising costs on to customers. The pickup in inflation has yet to concern some Federal Reserve policy makers, including Chairman Ben S. Bernanke, who predict the acceleration will be temporary.
“Commodity costs are pressuring prices,” Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, said before the report. “Core inflation is edging higher but has not yet reached a level to alarm the Fed.”
Forecasts for consumer prices in the Bloomberg survey of 76 economists ranged from gains of 0.3 percent to 0.7 percent.
Prices increased 3.2 percent in the 12 months ended April, the biggest gain since October 2008. The core CPI rose 1.3 percent from April 2010, the most since February 2010.
Unrest, Growth
Gains in food and energy prices have reflected unrest in the Middle East and increased demand from faster-growing economies such as Brazil, China and India. The cost of a gallon of regular gasoline at the pump averaged $3.81 in April, up from $3.54 the prior month, according to data from AAA, the nation’s largest motoring group.
Energy costs increased 2.2 percent from a month earlier, and have climbed at a 39 percent annual rate so far this year, today’s report showed. Gasoline prices increased 3.3 percent from the prior month.
Food costs rose 0.4 percent in April.
Commodities excluding food and fuel climbed 0.4 percent in April, the biggest advance since October 2009, showing cost increases are broadening.
The core rate was pushed up by increases in new and used automobiles and medical care, which rose 0.4 percent. A 0.4 percent drop in tobacco products, the biggest since April 2007, prevented core prices from climbing even more.
Raising Prices
Some U.S. companies say customers aren’t cutting back on purchases even amid price increases. Ian Cook, chief executive officer of Colgate-Palmolive, said yesterday that the New York- based toothpaste maker is not seeing consumers resist higher pricing. Cook spoke at a conference sponsored by Goldman Sachs Group Inc.
Commodity prices have retreated since the end of April, on concern rising interest rates in countries from China to India will slow the global economic recovery. Crude oil has dropped 13 percent so far this month on the New York Mercantile Exchange.
The declines may be bearing out Bernanke’s views on inflation. The Fed chairman and some of his colleagues, including Vice Chairman Janet Yellen and Federal Reserve Bank of New York President William C. Dudley, have said in recent speeches that the threat from accelerating prices will prove “transitory.”
“Measures of underlying inflation, though having increased modestly in recent months, remain subdued, and longer-term inflation expectations have remained stable,” Bernanke said last month at a press conference in Washington.
Broadest Gauge
The CPI is the broadest of three monthly price gauges from the Labor Department, because it includes goods and services. Almost 60 percent of the CPI covers prices consumers pay for services ranging from medical visits to airline fares and movie tickets.
Import prices rose 2.2 percent last month, higher than the median estimate in a Bloomberg survey, the Labor Department said May 10. Data yesterday from the Labor Department showed the producer-price index in April increased 0.6 percent and the cost of goods excluding fuel and food rose 0.3 percent, both more than projected.
To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net
