Washington, DC, May 14--Consumer prices rose at the slowest pace in four months in April as energy prices stabilized, suggesting that inflation remains safely below levels that might spur the Federal Reserve to raise interest rates rapidly.
The consumer-price index rose 0.2% in April, less than half the rate recorded in March, the Labor Department said Friday. The slowdown reflected a price deceleration in most major expenditure categories except housing and education.
The closely watched core index, which excludes volatile food and energy items, rose 0.3% after a 0.4% gain in March. That index was up 1.8% in the year through April, well within the range of 1% to 2% that Fed policy makers consider acceptable for the economy.
Economists had expected a 0.3% increase in the overall index and a 0.2% increase in the core index, according to a survey by Dow Jones Newswires and CNBC.
The Labor Department said the slowdown in consumer prices in April reflected a deceleration in most major expenditure categories except housing and education. Housing prices, which account for 40% of the overall index, rose 0.4% after a 0.3% gain in March. Prices of education and communication rose 0.3%, three times the rate in March.
But energy prices grew 0.1%, the slowest pace since November, and gasoline prices registered a 0.3% decline that was the biggest since November. Food prices rose 0.2%, matching the rate in March despite a 1.6% gain in dairy prices that was the largest in nearly five years. Transportation prices rose 0.1%, slowing from a 1.1% gain in March.
