WASHINGTON — U.S. consumer prices rose a modest 0.2
The consumer price index increased 2.5
Inflation has increased steadily since last summer, when it rose just 1.6
Slower growth in core prices may mean that the Federal Reserve will be less inclined to accelerate interest rate hikes. The Fed has
"After running hotter this year, underlying inflation simmered down in April," said Sal Guatieri, senior economist at BMO Capital Markets. "This will take some pressure off the Fed from stepping up the pace of tightening, but it should not affect the already-high odds of a June rate hike."
Still, higher gas prices are being felt by a lot of people, and that may weigh on spending elsewhere in the months ahead. It could be enough to offset some of the benefits from the Trump administration's tax cuts.
At the same time, businesses are paying higher costs for shipping and materials that face import tariffs, such as aluminum and steel.
Gas prices averaged $2.84 a gallon nationwide Thursday, up from $2.66 a month ago, and just $2.34 a year ago.
Oil prices have jumped 40
The Fed monitors a separate inflation gauge, which rose 1.9
Inflation fears on Wall Street have intensified in recent months with the unemployment rate sinking to a 17-year low of 3.9
But there are plenty of economists who remain skeptical that inflation will accelerate, even in the current job-rich environment. So far, wages aren't rising in tandem with the healthy economy as they have in the past. And even when wages did rise faster, in the late 1990s, inflation topped 3
Housing and medical costs are also rising. Rents have jumped 3.7
Economists at Bank of America Merrill Lynch note that the increases aren't yet broadly distributed throughout the economy. The cost of new cars and trucks has fallen 1.6
In April, used car prices dropped 1.6
Cable TV prices fell 0.5
"Having been a one-way upward bet for decades, cable TV providers are finally being exposed to market forces. Good," said Ian Shepherdson, chief economist at Pantheon Macroeconomics, a forecasting firm.
Food prices have also been flat, rising just 1.4
Christopher Rugaber, The Associated Press
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