RTTNews - Consumer prices came in unchanged in the month of April, according to a report released by the Labor Department on Friday, with a notable decrease in energy prices offsetting another substantial increase in tobacco prices.
The Labor Department said its consumer price index was unchanged in April after edging down by an unrevised 0.1 percent in March. The lack of growth in consumer prices came in line with the expectations of economists.
Energy prices showed another significant decrease, falling by 2.4 percent in April following a 3.0 percent drop in the previous month. Prices of motor fuel, fuel oil, natural gas, and electricity all declined.
The steep drop in energy prices was offset by a jump in tobacco prices, which rose 9.3 percent in April after surging up 11.0 percent in March. The jump in prices came as an increase in the federal excise tax on cigarettes went into effect.
Food prices slipped 0.2 percent in April after edging down 0.1 percent in March. Prices for transportation, recreation, and apparel also showed modest decreases. Meanwhile, prices for new and used motor vehicles rose 0.4 percent in April.
The report also showed that the core consumer price index, which excludes food and energy prices, rose 0.3 percent in April after rising 0.2 percent in each of the three previous months. Economists had expected core prices to edge up 0.1 percent.
While core prices rose more than expected, Chris Low, chief economist at FTN Financial said, Because it was unusual increases in auto prices and in tobacco, there's no need to worry about sustained core price pressures.
In fact, the core measures that matter most, including the owners' equivalent rent, rose less than or at their recent trend pace, Low added.
On an annual basis, consumer prices were down 0.7 percent compared to the same month a year ago, a notable acceleration compared to the 0.4 percent year-over-year decrease reported for March. Core prices were up 1.9 year-over-year in April.
The Labor Department released a separate report on Thursday showing that producer prices increased by a little more than expected in the month of April, with the increase in prices partly due to a rebound in food prices.
The report showed that the producer price index rose 0.3 percent in April following an unrevised 1.2 percent decrease in March. Economists had been expecting a slightly more modest increase in prices of about 0.2 percent.
At the same time, the Labor Department said that the core producer price index, which excludes food and energy prices, edged up 0.1 percent in April after coming in unchanged in the previous month. The modest increase came in line with economist estimates.
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