WASHINGTON, D.C.: US inflation rose at the fastest pace in three years in April as energy prices climbed, the government reported on Tuesday.
The Labor Department’s consumer price index rose 0.4 percent in April, the largest one-month increase since February 2013, after rising only 0.1 percent in March.
The overall index was up 1.1 percent from a year ago, still well below the Federal Reserve’s 2.0-percent inflation target.
The gains in prices were broad-based last month, including rises in medical care, shelter and transportation services. However, prices for new vehicles and apparel fell.
Food prices rose 0.2 percent after a drop in March, notably on higher prices for eating out that brought the dining tab up 2.7 percent from April 2015.
Energy prices, which had fallen from December to February, jumped 3.4 percent in April, their biggest one-month gain since early 2013. Gasoline prices at the pump soared 8.1 percent.
Stripping out volatile food and energy, core CPI rose 0.2 percent in April and was up 2.1 percent on a 12-month basis.
Ian Shepherdson of Pantheon Macroeconomics predicted the core CPI rate should end the year at 2.5 percent, as an underlying trends in goods prices seems to no longer be falling, benefiting from a weakening of the dollar.
“Behind the noise, the upward trend in inflation is clear,” he said.
The Fed’s preferred inflation measure, the PCE price index, was up 0.8 percent in March from a year ago, while core prices increased 1.6 percent.
At its March monetary policy meeting, the US central bank lowered its inflation forecast for 2016 to 1.2 percent from its prior 1.6 percent estimate.