**MNI 5 Things:April CPI Below Expectations +0.2%, Core +0.1%>

--5 Things We Learned From The April CPI Data

By Kevin Kastner, Sara Haire and Holly Stokes

     WASHINGTON (MNI) - The following are the key points from the 

Consumer Price Index data for April released by the Bureau of Labor 

Statistics Thursday: 

     - April CPI rose 0.2% month/month, below analysts' expectations for 

a 0.3% increase and on target with the +0.2% whisper number, so there 

should be little market reaction. The headline gain was +0.221% before 

rounding, so it was on the high side of 0.2%, but not nearly enough to 

meet analysts' expectations. As highlighted in an MNI 5 Things, analysts 

have a tendency to overestimate CPI in April, so this follows along that

trend.

     - Core CPI rose only 0.1% (+0.098% unrounded), vs +0.2% expected, 

with the large owners' equivalent rents category up 0.3%, lodging away 

from home prices up 0.7%, medical care prices up 0.1% and apparel prices 

up 0.3% after a 0.6% decline in the previous month. Providing some 

offset, new vehicle prices fell 0.5%, continuing their soft trend, while 

used car and truck prices fell 1.6%, the largest decline since March 

2009. 

     - The y/y rate for headline CPI ticked up to +2.5% in April vs 

+2.4% in March, while the y/y rate for core CPI remained at +2.1%, so 

no real movement in the 12-month measures to be concerned about. 

     - The core CPI data are generally well forecasted by analysts. 

Today's overestimates, combined with high misses in Wednesday's PPI 

report, suggests analysts will need to downgrade their assessments of 

current inflation. 

     - Energy prices rebounded by 1.4% for April after a 2.8% decline in 

March, with gasoline prices up 3.0%, but electricity prices down 0.6% 

and gas utilities prices down 0.4%. Energy prices were up 3.0% 

unadjusted, so seasonal adjustment did remove some of the rebound. CPI 

excluding only energy was up 0.1%, showing the underlying softness in 

the report. Food prices rose 0.3%. 

     ** MNI Washington Bureau: 202-371-2121 ** 

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