U.S. headline CPI rose +0.2% month-over-month in April, slightly below economists’ estimates. Year-over-year headline CPI growth accelerated to +2.5% in April, up from +2.4% growth as of March. Energy prices boosted headline CPI in April, as gasoline prices rose +3.0% month-over-month. Energy prices were up +7.9% year-over-year.
Core CPI rose +0.1% month-over-month in April after increasing +0.2% in March. Shelter costs (+0.3% month-over-month) and medical care services costs (+0.2% month-over-month), which are the two largest components of core CPI, contributed to growth. However, transportation services costs declined -0.4% in April and prices for used autos and new autos declined -1.6% and -0.5%, respectively. Together, transportation services and transportation commodities (ex-motor fuel) held down month-over-month core CPI growth by -0.1 ppt.
On a year-over-year basis, core CPI growth remained unchanged at +2.1% in April, the fastest pace of growth in over a year. Looking ahead, tightening labor market conditions and healthy economic growth are likely to generate moderate inflation pressure at or slightly above current growth rates. On a 6-month annualized basis, core and headline CPI were up 2.4% and 2.8% respectively, rates which are above the current paces of year-over-year growth.