US consumer prices barely edged higher in April as energy prices tumbled and food prices were flat, the Labor Department reported Friday.
The consumer price index increased 0.1 percent in April from March, when the CPI rose 0.2 percent for the second month in a row.
On an annual basis, inflation dug deeper into negative territory. The CPI was down 0.2 percent from April 2014, following a 0.1 percent decline in March.
Falling energy prices in April were the main factor holding back overall inflation. Energy prices were down 1.3 percent, with fuel oil tumbling 8.4 percent and gasoline 1.9 percent.
Core CPI, which excludes volatile food and energy costs, rose 0.3 percent for the month and was up 1.8 percent year-over-year. That kept it below the Federal Reserve’s medium-term 2.0 percent target for inflation.
The overall CPI increase matched analyst expectations, while the core CPI came in stronger than the 0.2 percent estimate.
“US inflation looks to be stabilizing, said Jennifer Lee of BMO Capital Markets in a research note. “Although inflation remains very tame, economic growth (sporadic as it is, it seems) is helping prices stabilize instead of fall.”
The Fed has attributed tepid overall inflation largely due to transitory factors, such as the decline in oil prices in the past year. It expects inflation to move back toward its target as the economy strengthens this year.
The central bank plans to raise its near-zero federal funds rate this year, with the timing of the liftoff data-dependent.
The Fed’s preferred inflation measure, the personal consumption expenditures price index, rose 0.3 percent in March year-over-year, while the core PCE price index was up a modest 1.3 percent.