US retail sales increased broadly in April while consumer prices rebounded, pointing to acceleration in economic growth and steadily rising inflation that could keep the Federal Reserve on track to raise interest rates next month.
The reports added to data on the labour market in suggesting economic activity picked up at the start of the second quarter after almost stalling in the first three months of the year.
The Commerce Department said retail sales rose 0.4% last month after an upwardly revised 0.1% gain in March.
Sales rose 4.5% in April on a year-on-year basis.
Economists had forecast overall retail sales increasing 0.6% last month.
Excluding automobiles, petrol, building materials and food services, retail sales gained 0.2% after advancing 0.7% in March.
These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
Prices of US Treasuries extended gains after the data, while US stock index futures slightly added to losses.
The dollar was weaker against a basket of currencies.
Fed funds futures show traders see a 78.5% chance of a rate hike at the Fed's 13-14 June policy meeting.
But the likelihood that the US central bank will raise rates twice before the end of the year fell after today’s data.
Consumer spending, which accounts for more than two-thirds of US economic activity, increased at a 0.3% annualised rate in the first quarter, the weakest pace since the fourth quarter of 2009.
That contributed to holding down first-quarter GDP growth to a 0.7% rate.
In a separate report today, the Labour Department said its Consumer Price Index rose 0.2% after dropping 0.3% in March.
The rise in prices suggested that March's drop, which was the first in 13 months, was an aberration.
In the 12 months through April, the CPI increased 2.2%.
While that was a slowdown from March's 2.4% increase, it still exceeded the 1.7% average annual increase over the past ten years.
Fuel prices jumped 1.2% after falling 6.2% in March.
Food prices rose 0.2%, with the cost of food consumed at home increasing 0.2% amid a surge in prices of fresh vegetables.
The so-called core CPI, which strips out food and energy costs, edged up 0.1% last month, reversing March's 0.1% dip.
The monthly core CPI was restrained by declines in the prices of wireless phone services, medical care, motor vehicles and apparel.
