Categories U.S. Markets News

Consumer prices rebound in April, but miss forecast

Consumer price inflation maintained the uptrend in April, but increased at a slower pace than estimated as a rebound in fuel prices and higher home rents were moderated by softness in the costs for healthcare and automobiles.

Data published by the Bureau of Labor Statistics Thursday showed the headline consumer price index rose 0.2% in April on a seasonally adjusted basis, with the main contributors to the growth being fuel and home rents. The outcome fell short of a 0.3% increase economists had predicted. It followed a 0.1% decline in the preceding month, which marked the first negative movement in six months. The index rose 2.5% over the past twelve months, the fastest growth in more than a year.

The sub-indexes of gasoline and food, considered to be volatile components, rose 3% and 0.3%, respectively. Adjusted for these two items, core consumer prices moved up 0.1%, clocking the third consecutive monthly increase. On a 12-month basis, the core inflation was 2.1%, which stayed above the central bank’s unofficial target of 2% for the second month in a row.

Last month’s rise in prices followed a 0.1% decline in March, which was the first negative movement in six months

Household furnishings, personal care and apparel were the other components that showed an uptick in April. The automobile segment registered a decline and the sub-index for medical care advanced at a slower pace last month, restricting the overall growth.

Going ahead, fuel prices are expected to rise further in the coming months, in line with the surge in crude oil prices that followed the government’s decision to withdraw from the nuclear deal with Iran.

In a separate report, the Labor Department today said the number of jobless claims stayed unchanged at 211,000 in the week ended May 5, which is the lowest in nearly 48 years. Economists were expecting an increase. Recent data had revealed that unemployment rate dropped to a 17-year low of 3.9% in April, while hiring softened in March and April after rising sharply in February.

Taking a cue from the tightening labor market and growing inflation pressure, amidst higher fuel prices, the Fed will likely hike short-term interest rates a couple of more times this year. Meanwhile, there are chances of a third rate hike if inflation pressures persist in the long term.

Most Popular

What to look for when CVS Health (CVS) reports Q3 earnings

Healthcare company CVS Health Corporation (NYSE: CVS) is all set to report earnings next week, with Wall Street expecting a mixed outcome. The company has been facing challenges in certain

eBay (EBAY): A few factors that helped drive growth in Q3 2024

Shares of eBay Inc. (NASDAQ: EBAY) stayed green on Friday. The stock has gained 32% year-to-date. The ecommerce leader delivered revenue and earnings growth for the third quarter of 2024,

CVX Earnings: Chevron reports lower revenue and profit for Q3 2024

Energy exploration company Chevron Corporation (NYSE: CVX) on Friday announced third-quarter 2024 financial results, reporting a decline in net profit and revenues. Net income attributable to Chevron Corporation dropped to

Tags

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top