U.S. consumer prices rise 0.4 percent

Washington -- U.S. consumer prices rose 0.4 percent, 0.1 percent less than the month before, the U.S. Labor Department said Tuesday.

But April's core consumer price index, excluding volatile food and energy prices, advanced 0.2 percent, compared with 0.1 percent in March, the department said.

Overall consumer inflation was up 2.6 percent from a year earlier, the department said.

Many economists say they believe the figures suggest the Federal Reserve will keep interest rates unchanged when it meets next month.

The Fed held the federal funds rate, the interest banks charge each other, at 5.25 percent last Wednesday, but warned inflation remained its main concern.

Consumer inflation through the first four months of the year rose at an annual rate of 4.8 percent, almost double 2006's 2.5 percent increase, the department said. The increase was largely due to higher food and energy prices, the department said.

But excluding food and energy, inflation was up an annual 2.2 percent through April, the department said.
Core prices rose 2.6 percent in 2006.

April energy prices climbed 2.4 percent, the department said. Housing, which accounts for 40 percent of the consumer price index, rose 0.2 percent for a second straight month.

Copyright 2007 by United Press International.