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Economy in Brief

U.S. Consumer Price Inflation Accelerates in April; Core Prices Strengthen
by Tom Moeller  May 12, 2021

• Monthly increase is highest since June 2009.

• Core goods prices surge.

• Energy prices ease.

Price inflation at the retail level is accelerating as consumer spending strengthens. The Consumer Price Index rose 0.8% (4.2% y/y) during April following an unrevised 0.6% March gain. It was the quickest increase in twelve years. The gain compared to an expected 0.2% rise in the Action Economics Forecast Survey. The CPI excluding food & energy jumped 0.9% last month after rising 0.3% in March. The 3.0% y/y rise roughly doubled the March y/y increase. A 0.3% April rise had been expected.

Goods prices excluding food & energy jumped 2.0% (4.4% y/y) in April after edging 0.1% higher during March. A 10.0% surge (21.0% y/y) in used car & truck prices powered the increase. In contrast, prices for new vehicles edged 0.5% higher (2.0% y/y). Also strong were education & communication product costs which strengthened 3.1% (-2.2% y/y) and reversed most of three straight months of decline. Recreation product prices also were strong and rose 1.2% (2.9% y/y). Prices for household furnishings & supplies rose 0.9% (3.2% y/y) but the cost of household appliances fell 0.8% (+6.5% y/y). Medical care product prices rose 0.6% (NSA) but fell 1.7% y/y. Apparel prices rose 0.3% (1.9% y/y) after falling for two straight months.

Services prices strengthened 0.5% (2.5% y/y) during April after rising 0.4% in March. Transportation services prices surged for a second month, posting a 2.9% gain (5.6% y/y) as the cost of public transportation jumped 5.8% (7.0% y/y). Recreation services prices rose 0.8% (1.8% y/y) for a second straight month. Shelter costs rose 0.4% (2.1% y/y). The owners' equivalent rent of primary residences increased 0.2% (2.0% y/y) for a second month while rents of primary residences gained 0.2% (1.8% y/y). Education & communication services prices improved 0.1% (2.0% y/y). Medical care services prices held steady (2.2% y/y).

Food price inflation picked up last month by 0.4% (2.4% y/y) following a 0.1% rise. Food-at-home prices rose 0.4% (1.2 % y/y). Dairy prices rebounded 0.6% both month-to-month and y/y, while cereal & bakery product costs rose 0.4% (0.1% y/y). Fruit & vegetable prices jumped 0.8% (3.3% y/y). Meat, poultry & fish prices gained 0.6% (2.7% y/y) while egg prices declined 0.5% (-8.9% y/y). Nonalcoholic beverage prices improved 0.3% (0.2% y/y). Prices for food away-from-home edged 0.3% higher (NSA, 3.8% y/y).

Energy prices eased 0.1% (+25.1% y/y) following four straight months of strong increase. Gasoline prices fell 1.4% in April (+49.6% y/y) but have risen sharply in recent weeks. Fuel oil prices declined 3.2% (NSA, +37.3% y/y) and reversed the March increase. Natural gas prices strengthened 2.4% last month (12.1% y/y) while the cost of electricity jumped 1.2% (3.6% y/y).

The Consumer Price Index data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.

Consumer Price Index, All Urban Consumers (% chg) Apr Mar Feb Apr Y/Y 2020 2019 2018
Total 0.8 0.6 0.4 4.2 1.2 1.8 2.4
Total less Food & Energy 0.9 0.3 0.1 3.0 1.7 2.2 2.1
  Goods less Food & Energy 2.0 0.1 -0.2 4.4 0.1 0.2 -0.2
  Services less Energy 0.5 0.4 0.2 2.5 2.2 2.8 2.9
 Food 0.4 0.1 0.2 2.4 3.4 1.9 1.4
 Energy -0.1 5.0 3.9 25.1 -8.5 -2.1 7.5
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