US inflation eases
US consumer prices rose slightly less than expected in April, despite soaring food costs.
The US Consumer Prices Index (CPI) in April rose 0.2% in April, versus expectations of a 0.3% rise. The April increase follows a 0.3% rise in March.
The annual inflation rate eased slightly to 3.9%. The core CPI showed a 2.3% increase year-on-year, compared with a 1.2% annual rate over the previous three months.
With food and energy costs stripped out, the April reading was even more benign, showing just a 0.1% increase on the previous month, suggesting that slackening consumer demand is starting to deter retailers from pushing up prices.
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The inflation data was welcomed by the bonds market which perked up on hopes that the better than expected inflation scenario will give the Federal Reserve more leeway to push through further base rate cuts.
Energy costs were surprisingly unchanged in April, with petrol prices dipping 2% while natural gas prices rose 4.8%.
Food costs increased 0.9% on the month to stand 5.1% higher than a year earlier.
