CPI flat in April, while core rate rises more-than-expected 0.3%
Led by a large decline in energy prices, U.S. consumer prices were unchanged in April after seasonal adjustments and have fallen 0.7% in the past 12 months, the largest decline in 54 years, the Labor Department reported Friday.
The decline in the consumer price index has sparked concerns about deflation in the United States. However, core inflation - which excludes volatile food and energy prices - has not declined and in fact has accelerated in the past four months.
In the past year, the core CPI is up 1.9%.
In April, the seasonally adjusted core CPI rose 0.3%, boosted by a 9.3% increase in tobacco prices as a new federal excise tax to pay for children's health care kicked in. Excluding tobacco, the CPI fell 0.1% and the core CPI rose 0.1%.
Inflation was higher than expected in April. Economists surveyed by MarketWatch were looking for the CPI to fall 0.1% and for the core rate to rise 0.1%.
With consumer prices flat and average wages up 0.1%, real weekly earnings rose 0.1% in April and were up 2.6% since April 2008.
In a separate report, the New York Federal Reserve Bank said manufacturing activity worsened again in the region, but at the slowest pace since August. The Empire State index rose to a negative 4.6 from negative 14.7. Anything below zero shows worsening conditions. See full story.
Details of CPI
Outside of tobacco, most prices either fell or rose slightly in April.
Food prices fell 0.2%, the biggest decline in seven years.
Energy prices fell 2.4% after seasonal adjustments. Gasoline prices fell 2.8%. Natural gas prices fell 7%.
Shelter prices rose 0.2%, including a 0.2% rise in rents and a 0.1% increase in owners' equivalent rents. Hotel fares rose 0.5% after falling sharply the previous two months.
Medical care prices rose 0.4%, as drug prices rose 0.5%.
Apparel prices fell 0.2%.
Transportation prices fell 0.4% on lower fuel bills. New car prices rose 0.4%. Airfares fell 1.5%.
Recreation prices fell 0.4%, the largest decline in 16 years.
