Christopher Quinones restocked cream cheese at a Whole Foods Market in Woodmere Village, Ohio. Food prices rose sharply in April, helping to push consumer prices up 0.3 percent.
TONY DEJAK • Associated Press,
April consumer price rise points to an economic upswing
- Article by: NELSON D. SCHWARTZ
- New York Times
- May 15, 2014 - 9:32 PM
U.S. consumer prices increased in April at the fastest pace since last summer, the government reported Thursday, a development that will please policymakers at the Federal Reserve and, together with other new data, suggests that the economy may be on an upswing.
In recent months, the economy has sent mixed signals, confounding investors, economists and Fed policymakers alike.
After growing at a healthy rate of more than 3 percent in the second half of 2013, with sizable employment gains in the fall, economic growth slowed abruptly in the first quarter of 2014. In particular, hiring in December and January dropped significantly from the pace in October and November.
Many experts, including the Fed, blame much of the weakness on very cold, wintry conditions in many parts of the country that inhibited business activity and some retail spending. But most economists now expect growth to pick up in the current quarter.
Meanwhile, although higher inflation is usually a worry for central bankers, and many baby boomers remember it as a problem from the 1970s, the Fed has been more worried about the risk of stagnant prices, which reflect an economy struggling to recover from the financial crisis and recession.
On Wednesday, the Bureau of Labor Statistics reported that the consumer price index jumped 0.3 percent last month, helping lift its 12-month change to 2 percent, in line with the Fed’s target rate.
“Virtually anywhere you look in this report, you see inflation is turning somewhat higher,” said Dean Maki, chief U.S. economist at Barclays. “Prices for services have risen at a solid pace for some time, but what’s changed as of late is that goods prices have started to firm up after actually dropping.”
The less volatile core rate of the consumer price index, which excludes food and energy prices, increased 0.2 percent in April, compared with the 0.1 percent gain economists had expected.
Energy and food prices also rose sharply, lifting the total increase for consumer prices to 0.3 percent. Meat prices rose 2.9 percent, the biggest monthly jump in more than a decade.
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