US consumer prices increase solidly in April

US consumer prices increase solidly in April

WASHINGTON - U.S. consumer prices increased in April on higher gasoline costs and rents, while underlying inflation remained strong as used motor vehicle prices rebounded, potentially ensuring that the Federal Reserve keeps interest rates elevated for a while.

The Consumer Price Index (CPI) rose 0.4% last month after gaining 0.1% in March, the Labor Department said on Wednesday. In the 12 months through April, the CPI increased 4.9% after advancing 5.0% on a year-on-year basis in March.

The annual CPI peaked at 9.1% last June, which was the biggest increase since November 1981, and is subsiding as last year's initial surge in energy prices following Russia's invasion of Ukraine drops out of the calculation.

Economists polled by Reuters had forecast the CPI climbing 0.4% last month and increasing 5.0% year-on-year.

Gasoline prices rose last month after Saudi Arabia and other OPEC+ oil producers announced further oil output cuts.

But oil prices have since been largely trending lower, pushing gasoline costs down as risks of a recession have increased, because of the Fed's punitive rate hikes, tightening credit conditions and an impasse over raising the federal government's borrowing cap.

The inflation data followed last Friday's employment report, which showed an acceleration in job and wage growth in