WASHINGTON (MNI) - The April CPI showed prices moderating a little more than expected, largely a result of gasoline price dips but also reflecting a confluence of soft pricing in the medical and clothing areas.
April CPI posted -0.4% and core +0.1% (+0.05199% unrounded), slightly less than expected. These produced over-the-year rates of +1.1% overall (its slowest since November 2010 after a second monthly drop) and +1.7% core.
Overall inflation was driven by -4.3% in energy as gas (-8.1% adjusted, following -3.7% NSA) and fuel oil prices fell. Sharp increases in natural gas and electricity failed to offset this in the energy index.
Overall CPI would have been +0.1% without gasoline, the Bureau of Labor Statistics estimated.
Food posted +0.2% with cereals, meats, and beverages up.
In core, autos (new vehicles +0.3%--boosted by seasonal adjustment--and used +0.6% in a fourth gain) and tobacco +0.6%, and owners equivalent rent +0.2% gave boosts. But this was offset by medical care at unchanged (its first non-advance since July 2010 as prescription prices fell), apparel -0.3% as womenswear fell, airfares -0.7%,
appliances -0.6%, and recreation -0.1%.
In a separate report, initial unemployment claims jumped 32,000 to 360,000 in the May 11 week, and the Labor Department analyst said there was no specific reason. That is, the up-move does not appear related to sequester layoffs, he said.
There are a few other recent instances of claims surges that were almost as large, but they were generally after holidays for 2013. The latest reading was the biggest gain since November and the highest level since March 30.
Unadjusted claims gained just 15,436, so about half the advance probably reflected poor seasonal adjustment.
In any event, the payroll survey is in the following week, giving time for claims to reverse lower. The April claims average was 343,000 and the mid-April claims reading during the payroll survey was 355,000.
Continuing unemployment claims were down 4,000 to 3.009 million for the May 4 week, continuing a downtrend but stuck above the 3 million cut point. The insured unemployment rate fell 0.1 point to 2.2%, suggesting the overall unemployment rate might decline ahead.
Overall these were two weak reports that suggest the U.S. economy remains soft.