U.S. Core Consumer Prices Rise More Than Expected In April

(RTTNews) - Consumer prices in the U.S. rose in line with economist estimates in the month of April, according to a report released by the Labor Department on Friday, although the report also showed a bigger than expected increase in core prices.

The Labor Department said its consumer price index inched up by 0.1 percent in April after rising by 0.2 percent in each of the two previous months. The modest increase matched economist estimates.

The uptick in consumer prices was partly due to an increase in prices for shelter, which rose by 0.3 percent for the second straight month.

On the other hand, the report said energy prices tumbled by 1.3 percent in April after jumping by 1.1 percent in March. Food prices were unchanged.

The core consumer price index, which excludes food and energy prices, rose by 0.3 percent in April following two consecutive 0.2 percent monthly increases.

The increase in core consumer prices exceeded the 0.1 percent uptick that was anticipated by economists.

Higher shelter costs contributed to the increase in core prices along with higher prices for medical care, household furnishings and used cars and trucks.

Paul Ashworth, Chief U.S. Economist at Capital Economic said, "Overall, with the employment cost index suggesting that wage growth is accelerating and the CPI indicating that underlying price inflation is rising, the Fed can't wait forever before beginning to raise interest rates from near-zero."

"September is still the most likely 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," he added.

Compared to the same month a year ago, the report said consumer prices were down by 0.2 percent, while core prices were up by 1.8 percent.