The cost of living excluding food and fuel rose at a faster pace than expected in April, indicating inflation is inching toward the Federal Reserve’s goal.
The core consumer-price index climbed 0.3 percent, the biggest gain since January 2013, reflecting broad-based increases, a Labor Department report showed today in Washington. The median forecast of 84 economists surveyed by Bloomberg called for a 0.2 percent advance. Prices including food and fuel rose 0.1 percent.
Costs will probably continue to increase as fuel expenses stabilize and a lack of apartments pushes up rents, one of the biggest categories. Further firming in price pressures should help Federal Reserve policy makers gain confidence inflation will move toward their 2 percent goal as they consider their first interest-rate rise since 2006.
“We’re likely going to see inflation pick up in the second half of this year,” Ryan Sweet, senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said before the report. It “will start moving back toward the Fed’s target, but it’s going to be a gradual process.”
Estimates for core consumer prices in the Bloomberg survey ranged from little changed to a 0.3 percent advance. At a year-over-year rate, they rose 1.8 percent in April, the same as in the prior month.
Consumer prices including all categories were projected to rise 0.1 percent, with estimates ranging from a 0.4 percent drop to a 0.4 percent advance. The CPI declined 0.2 percent in the 12 months ended in April, the biggest year-to-year drop since October 2009. That mainly reflected the plunge in energy costs that has recently abated.