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US prices rise by 0.4% on higher food costs

US - Clothing prices bounced back last month from March fall
US - Clothing prices bounced back last month from March fall

US consumer prices rose as expected in April on higher food and energy prices, but continued to exhibit little sign of a broader pick-up inflation that would trouble the US Federal Reserve.

The US Labour Department said its Consumer Price Index increased 0.4% after rising 0.5% in March.

Core CPI - excluding food and energy - gained 0.2% after edging up 0.1% in March and in line with economists' expectations.

The monthly increase in core CPI has been bouncing around 0.1% and 0.2% since November.

The core reading is closely watched by the US central bank as a guide to monetary policy.

US Fed officials believe high commodity prices, which undercut economic growth in the first quarter, will not have a lasting effect on inflation.

Gasoline prices accounted for almost half of the rise in overall consumer inflation last month, advancing 3.3%.
The pace of increase, however, slowed from March's 5.6% rise.

Food prices rose 0.4% after increasing 0.8% in March.

Rising costs for housing, new vehicles, used trucks and medical costs bumped up core inflation last month.

Shelter costs, which account for about 40% of core CPI, rose 0.1%, rising by the same margin for a seventh straight month.

Prices for new vehicles rose 0.7% last month, likely reflecting tight inventories as a shortage of parts in the wake of the devastating earthquake and tsunami in Japan disrupts production.

They increased by a similar margin in March.

Apparel prices rebounded 0.2% from a 0.5% fall in March.

In the 12 months to April, core CPI rose 1.3% after increasing 1.2% in March.

Fed officials, however, would like to see that closer to 2%.

Overall consumer prices rose 3.2% year-on-year after rising 2.7% in March.