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U.S. Consumer Prices Rise 0.3% In April, Slightly Less Than Expected

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Consumer prices in the U.S. increased by slightly less than anticipated in the month April, according to a report released by the Labor Department on Friday.

The Labor Department said its consumer price index rose by 0.3 percent in April after climbing by 0.4 percent in March. Economists had been expecting another 0.4 percent increase.

Energy prices showed another substantial increase during the month, surging up by 2.9 percent in April after jumping by 3.5 percent in March. A 5.7 percent spike in gasoline prices account for over two-thirds of the increase by the headline index.

Excluding food and energy prices, core consumer prices inched up by 0.1 percent for third consecutive month compared to economist estimates for a 0.2 percent uptick.

Higher prices for shelter, medical care, education, and new vehicles more than offset significant decreases in prices for used cars and trucks and apparel.

Compared to the same month a year ago, consumer prices in April were up by 2.0 percent, reflecting a modest acceleration from the 1.9 percent growth in March.

The annual rate of growth in core consumer prices also crept up to 2.1 percent in April from 2.0 percent in the previous month.

"While it is still early to determine whether low inflation readings are as transitory as Fed Chair Powell asserts, the soft April core CPI reading suggests inflation is likely to remain subdued in the coming months," said a note from Oxford Economics."

The note added, "This will further fuel market expectations that the Fed will need to cut rates to bolster inflation and inflation expectations, especially in the context of rising trade tensions vis-à-vis China."

On Thursday, the Labor Department released a separate report showing producer prices increased in line with economist estimates in the month of April.

The Labor Department said its producer price index for final demand rose by 0.2 percent in April after climbing by 0.6 percent in March. The uptick in prices matched expectations.

Excluding food and energy prices, core producer prices inched up by 0.1 percent in April following a 0.3 percent increase in March. Economists had expected core prices to edge up by 0.2 percent.

Compared to the same month a year ago, producer prices were up by 2.2 percent in April, unchanged from the previous month. The annual rate of core price growth was also unchanged at 2.4 percent.

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