US Consumer Prices Rose 0.2% in April

US Consumer Prices Rose 0.2% in April

In the 12 months through April, the CPI increased 2.5 percent, the biggest gain since February 2017, after rising 2.4 percent in March.

Copper jumped 1.7 percent to $3.108 a pound, the highest in two weeks. Thursday's weak core inflation number is "not enough to derail the Fed's June hike, but points toward lower rates further out the curve", wrote Ian Lyngen, head of USA rates strategy at BMO Capital Markets in NY.

In that statement, policymakers said they expected annual inflation to run close to its "symmetric" 2 per cent target over the medium term. The Fed last week left its key interest rate unchanged while noting that inflation is nearing its optimal goal. The Fed is projected to raise interest rates in June for the second time this year, though officials were divided in March over whether three or four total hikes in 2018 were warranted. The dollar slipped against a basket of currencies.

Competition for workers is expected to push up wage growth, which has remained moderate.

"It is not enough to say that companies continue to be reluctant to lay off workers, they are becoming increasingly reluctant to do so", said John Ryding, chief economist at RDQ Economics in NY.

Wages, which feed into inflation pressures, are growing only moderately even as the job market is tight. Gasoline prices led the increase, growing 3.0%.

Further increases are likely after crude oil prices jumped to three-and-a-half-year highs on Wednesday in the wake of US President Donald Trump's decision to pull the US out of an worldwide nuclear deal with Iran.

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The pan-European FTSEurofirst 300 index of leading regional shares fell 0.25 percent, but shares in London, Germany and France were higher.

Food prices rose 0.3% last month after nudging up 0.1% in March.

Healthcare cost increases slowed, edging up 0.1 percent after advancing 0.4 percent in March. But those gains were partially offset by declines in electricity (down 0.6%), used cars and trucks (down 1.6%) and new vehicles (down 0.5%).

For the month, gasoline prices rose 3.0% and are up 13.4% over the a year ago.

Royce Mendes, senior economist at CIBC World Markets said that he expects the latest inflation data to weigh on a surging US dollar, which should provide some near-term support for gold.

This story has not been edited by Firstpost staff and is generated by auto-feed.

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