WASHINGTON (AP) — U.S. consumer prices were up slightly in April, but overall gains were held back by another decline in energy costs that offset the biggest one-month jump in medical care in eight years.
Consumer prices edged up 0.1 percent last month compared to March, when prices rose a modest 0.2 percent, the Labor Department said Friday. Energy costs fell 1.3 percent and food prices were unchanged, keeping inflation modest.
Core inflation, which excludes volatile food and energy, climbed 0.3 percent in the biggest gain in 15 months. The figure was driven higher by a 0.7 percent rise in medical care, reflecting a surge in hospital costs.
Inflation pressures have generally been well contained since the recession.
Consumer prices are down 0.2 percent from 12 months ago, reflecting the big drop in energy prices, which have fallen nearly 20 percent over the past year. Prices excluding energy and food are up 1.8 percent from a year ago.
In April, gasoline prices on a seasonally adjusted basis were down 1.7 percent after having posted increases in the past two months. The nationwide average for gasoline is currently $2.73, according to the AAA Daily Fuel Gauge. While that is up 27 cents from a month ago, it is still 91 cents below the level of a year ago.
The April price report did show gains in several areas outside of food and energy. In addition to the jump in medical costs, the price of used cars rose 0.6 percent although the price of a new car increased a more modest 0.1 percent. The cost of home furnishings rose 0.5 percent, the largest gain since September 2008, but the price of clothing fell 0.3 percent, the first decline for apparel since December
Inflation by a price gauge preferred by the Federal Reserve has been running below the Fed's 2 percent target for nearly three years. The Fed aims to keep prices rising at this level, which it views as achieving its goal of price stability. Anything below that target raises the danger of deflation, when prices fall so sharply that they can disrupt economic growth.
The Fed has kept interest rates at a record low near zero for the past six years in an effort to stimulate stronger economic growth and re-establish the millions of jobs lost during the 2007-2009 recession. Fed officials have said they want to be "reasonably confident" that inflation is headed toward their 2 percent target, which would signal a stronger economy, before they start raising rates.
With strong employment gains over the past year and economic growth expected to rebound after a winter slowdown, many economists believe the Fed will start raising rates later this year.
Minutes of their discussions at their last meeting in April indicated that it is unlikely the first rate hike will occur at the Fed's June meeting. Many economists are looking at September or even later this year as the likely time the Fed will start raising rates.