April CPI rises 0.6% as annual inflation ticks up to 3.8%

"The all items less food and energy index was up 2.8% annually and 0.4% from a month prior. On a monthly basis, the energy index rose 3.8%, accounting for over 40% of the all-items index's monthly increase, while the food index rose 0.5%. Although the energy index's monthly increase was high, it was lower than the 10.9% monthly increase recorded in March."

"Year-over-year, the energy index was up 17.9% in April and the food index jumped 3.2%. The gasoline index was a main contributor to the energy index's increase, as it jumped 28.4% from a year ago, according to the data. Anyone who is filling their tank with gas this week is seeing firsthand the impact of this inflation report."

"Rising energy costs are the main driver that will continue to apply pressure to the Federal Reserve to resist cutting interest rates, despite the expected change in the chair position later this week, Selma Hepp, Cotality's chief economist, said in a statement. We will see three speeches this week from members of the Fed committee, and we hope there will be some indication of how the new leadership will approach interest rate policy going forward."

"The index for shelter was up 0.6% from March and 3.3% compared to a year prior. This increase came as the indexes for rent and owners' equivalent rent both rose 0.5% on a monthly basis. Other indexes with notable increase over the past 12 months include medical care (+2.5%), airline fares (+20.7%), household furnishings and operations (+3.9%) and recreation (+2.3%)."

The all-items index excluding food and energy increased 2.8% annually and 0.4% from the prior month. The energy index rose 3.8% in the month, contributing more than 40% of the all-items index’s monthly increase, while the food index rose 0.5%. The energy index’s monthly gain was below the 10.9% increase recorded in March. Year over year, the energy index rose 17.9% in April and the food index rose 3.2%. The gasoline index was a major contributor, jumping 28.4% from a year ago. Shelter rose 0.6% from March and 3.3% year over year, with rent and owners’ equivalent rent each up 0.5% monthly. Medical care, airline fares, household furnishings and operations, and recreation also increased over the past 12 months.

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