US consumer prices recorded their largest increase in 10 months in April, pointing to some inflation in the economy.
The Labor Department said its consumer price index increased 0.3% last month as food prices rose for a fourth consecutive month and the cost of petrol surged. It was the biggest rise since June last year.
In the 12 months through April, consumer prices rose 2% after gaining 1.5% in March.This was the biggest increase since July last year, which in part reflected prices coming off last year's low base when energy costs decreased.
Economists polled by Reuters had forecast the CPI increasing 0.3% from March and gaining 2.0% from a year ago.
Stripping out food and energy prices, the so-called core CPI rose 0.2% after advancing by the same margin in March.
In the 12 months through April, the core CPI increased 1.8%, the largest gain since August last year and followed a 1.7% rise in March.
Economists had forecast the core CPI rising only 0.1% from March and 1.7% from a year ago.
The Federal Reserve targets 2% inflation and it tracks an index that is running even lower than the CPI. Policymakers worry that inflation is running too low, but the steady increase in prices should ease those concerns.
A report yesterday showed a strong rise in producer prices in April, with increases spread from goods to services, leaving economists to anticipate gains in consumer inflation in the months ahead.
Food prices rose 0.4% in April, rising by the same margin for a third consecutive month. A drought in the West pushed up prices for meat, dairy, fruit and vegetables. Poultry and fish prices also rose as did the cost of eggs.
Petrol prices rose 2.3%, advancing for the first time since December, which offset a 2.6% plunge in electricity prices, the largest drop since 1986.
Within the core CPI, shelter costs increased 0.2% ,slowing from the prior month's 0.3% rise. There were also increases in medical care costs, used cars and trucks prices and airline fares.