Consumer Prices, Retail Sales Both Saw Upticks in April

(CN) — Consumer prices rose slightly in April as energy prices rebounded after a sharp decline in March.

The Labor Department said Friday that consumer prices rose 0.2 percent after a 0.3 percent drop in March. That decline had been the largest drop in more than two years.

Energy prices rose 1.1 percent in April after dropping 3.2 percent the previous month.

Core inflation — a measure that excludes the volatile food and energy categories — rose 0.1 percent. Over the past 12 months, inflation is up 2.2 percent. Core prices have risen 1.9 percent.

It’s the first time the core inflation index has fallen below 2 percent since October of 2015.

Gas prices rose 1.2 percent in April after declining 6.2 percent in March and 3 percent in February.

Food prices rose 0.2 percent, driven by the fresh vegetable category, which rose 5.1 percent — the biggest increase in that category since February 2011.

The cost of cellphone plans, which contributed to last month’s overall decline, fell again along with medical care, apparel, new and used vehicles and auto insurance.

Friday’s report comes on the heels of a Labor Department assessment of inflation at the wholesale level that showed a rise of 0.5 percent. Today’s report suggest the rise in producer prices have yet to be passed on to consumers.

On a related note, the Commerce Department said Friday that retail sales increased 0.4 percent in April from March. Sales ticked up just 0.1 percent in March and fell in February.

The government says the uptick was driven by consumer spending at auto dealerships, hardware stores –typically a winner in the Spring — and at both online and brick-and-mortar retailers, especially those selling electronics, appliances and sporting goods.

Meanwhile, sales fell at grocery stores and clothing merchants.

But consumers also ate out more, with spending at restaurants and bars 0.4 percent. Auto sales also rose in April, rising 0.7 percent after falling in March.

The increase suggests that consumers are poised to spur faster growth in the April-June quarter after the economy barely expanded in the first three months of the year.

Consumer spending — which also includes spending on services such as utilities — rose at its slowest pace in more than seven years in the first quarter.

The sales gains were widespread, as Americans spent more at electronics and appliance stores, health care retailers, and sporting goods outlets.

 

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