WASHINGTON – Consumer inflation eased a bit in April even though gasoline prices surged for a second straight month.
Consumer prices rose by 0.4 percent last month following a 0.6 percent jump in March, the Labor Department reported Tuesday. The April increase was slightly lower than expected although gasoline pump prices jumped by 4.7 percent after an even bigger 10.6 percent March advance.
Core inflation, which excludes volatile food and energy costs, edged up just 0.2 percent as falling prices for clothing, airline tickets and tobacco products helped restrain underlying inflation.
The nationwide average price for gasoline has surged to a record $3.07 per gallon, according to the latest Lundberg Survey, surpassing the old mark of $3.03 per gallon set last August.
The big price spike has been blamed on unexpected refinery shut downs that have crimped supplies. Analysts are warning that consumers can expect further price increases.
Through the first four months of this year, consumer inflation is rising at an annual rate of 4.8 percent, almost double the 2.5 percent increase for all of 2006. The acceleration has occurred in large part because of higher costs for food and energy.
However, excluding energy and food, core inflation is up at an annual rate of just 2.2 percent through April, an improvement from the 2.6 percent rise in core prices for all of 2006.
That improvement is certain to be welcomed at the Federal Reserve, where policymakers are hoping that their campaign to restrain inflationary pressures is beginning to show results. After pushing rates up over a two-year period, the Fed has left rates unchanged for the past 11 months, watching to see whether the slowing economy will reduce price pressures.