Fresh vegetables, energy and housing expenses drove consumer inflation higher in the U.S. during April. April CPI figures released by the Bureau of Labor Statistics indicate consumer prices rose by 0.2% for the month, which was in line with expectations and a big turn-around from March’s -0.3%.On a 12 month basis, consumer prices increased by 2.2%.
Core prices, a measure of prices which strips out food and energy price changes, rose by 0.1% for the month, below expectations of a 0.2% rise but a reversal of March’s 0.1% decline. Annual core inflation has inched down for a second month in a row to 1.9% from March’s 2.0% (seasonally adjusted).
Although the consumer price index (CPI) is not the U.S. Fed’s preferred measure of inflation, rises and falls in the rate of CPI inflation add to the overall picture of the US economy’s price level. U.S 2 year yields fell 4bps to 1.29%, U.S 10 year yields fell 7bps to 2.32% and the U.S. dollar weakened against other major currencies.