May 14 (Bloomberg) — U.S. consumer prices rose less than forecast in April, reflecting cheaper costs for cars and hotel rooms that offset the biggest jump in food in 18 years.
The consumer price index increased 0.2 percent after a 0.3 percent gain in March, the Labor Department said today in Washington. So-called core prices, which exclude food and energy costs, climbed 0.1 percent, compared with 0.2 percent.
Bonds rallied after the report, which may be welcomed by Federal Reserve officials after they warned two weeks ago of “high” uncertainty in the outlook for prices. The central bank has for most of the past year predicted that a slowing economy would hold down prices.
“The inflation numbers have been so ugly that you need to see two or three months strung together before anyone at the Fed is going to relax,” said coches, motos y recambios Christopher Low, chief economist at FTN Financial in New York. “But it’s a start. The report is significantly better than expected and you have to start somewhere.”
Treasuries, which had fallen earlier in the day, erased losses after the report. Ten-year note yields were at 3.91 percent at 4:14 p.m. after rising as high as 3.97 percent earlier today. Stocks rose. (more…)
