US Inflation Rate Lower Than Expected At 2.2%

Consumer prices in the United States increased 2.2 percent year-on-year in April of 2017, lower than 2.4 percent in March and below market expectations of 2.3 percent. It is the lowest inflation rate so far this year due to a slowdown in energy, transport and health cost. The monthly index increased 0.2 percent, recovering from a 0.3 percent fall in March and matching forecasts, boosted by prices of shelter, energy, tobacco and food.

Year-on-year, energy prices rose 9.3 percent, lower than 10.9 percent in March. In addition, inflation slowed for services less energy (2.79 percent from 2.9 percent in March), namely transportation services (3.1 percent from 3.8 percent) and medical care (3.1 percent from 3.4 percent). Inflation was steady for shelter (3.5 percent) and food (0.5 percent). 

Annual core inflation, which excludes food and energy eased to 1.9 percent from 2 percent in the previous month. It is the lowest core inflation since October of 2015 and below market expectations of 2 percent.

On a monthly basis, increases in prices for shelter, energy, tobacco, and food were the main contributors to the rise in the CPI. The energy index rose 1.1 percent, with all 3 of its major component indexes rising. The food index gained 0.2 percent, mostly due to a sharp increase in fresh vegetables.

Excluding food and energy, consumer prices edged up 0.1 percent in April after declining 0.1 percent in March. The shelter index went up 0.3 percent, and the tobacco index increased sharply over the month. However, many indexes declined, including those for wireless phone services, medical care, motor vehicle insurance, apparel, used cars and trucks, recreation, and new vehicles.    

US Inflation Rate Lower Than Expected At 2.2%

BLS | Joana Taborda |
5/12/2017 12:58:45 PM