The Bureau of Labor Statistics released the April CPI data this morning. Year-over-year unadjusted Headline CPI came in at 1.95%, which the BLS rounds to 2.0%, up from 1.51% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.83% (rounded to 1.8%), up from the previous month's 1.66%.
The YoY Headline number is at a nine-month high and YoY Core is at a 13-month high.
Here is the introduction from the BLS summary, which leads with the seasonally adjusted data monthly data:
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.0 percent before seasonal adjustment.
The indexes for gasoline, shelter, and food all rose in April and contributed to the seasonally adjusted all items increase. The gasoline index rose 2.3 percent; this led to the first increase in the energy index since January, despite declines in the electricity and fuel oil indexes. The food index rose 0.4 percent for the third month in a row, as the index for meats rose sharply.
The index for all items less food and energy rose 0.2 percent in April, with most of its major components posting increases, including shelter, medical care, airline fares, new vehicles, used cars and trucks, and recreation. The indexes for apparel, household furnishings and operations, and personal care were all unchanged in April.
The all items index increased 2.0 percent over the last 12 months; this compares to a 1.5 percent increase for the 12 months ending March, and is the largest 12-month increase since July. The index for all items less food and energy has increased 1.8 percent over the last 12 months. The energy index has risen 3.3 percent, and the food index has advanced 1.9 percent over the span. [More…]
Investing.com was looking for increases of 0.3% for Headline CPI and 0.1% for Core. Their year-over-year forecasts were and 2.0% for Headline and 1.7% for Core.
The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since 1957. The second chart gives a close-up of the two since 2000.
On the chart below I've highlighted 2 to 2.5 percent range. Two percent has generally been understood to be the Fed's target for core inflation. However, the December 12 FOMC meeting raised the inflation ceiling to 2.5% for the next year or two while their accommodative measures (low Fed Funds Rate and quantitative easing) are in place.
Federal Reserve policy, which has historically focused on core inflation, and especially the core Personal Consumption Expenditures (PCE), will see that the latest core CPI remains slightly below the near-term target range of 2 to 2.5 percent.
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