- Amherst Pierpont Securities
US consumer prices climbed modestly in March for the first time in four months, meaning little urgency for the Fed to hike interest rates in the months to come. According to the Labor Department, its Consumer Price Index inched up 0.1% last month as a recovery in gasoline prices was partially offset by a decline in the cost of food. While the measure rose the most since November, it came in against economists' expectations for a 0.2% gain. In the 12 months through March, the CPI increased 0.9% after rising 1.0% in February. The core CPI, which excludes food and energy costs, inched up 0.1%, the smallest since August and followed a 0.3% rise in February.
A separate report showed the number of Americans filing for unemployment benefits unexpectedly fell last week to match its lowest level since 1973, in the latest sign of a strong labour market. Initial claims for jobless benefits decreased by 13,000 to a seasonally adjusted 253,000 in the week ended April 9. Jobless claims have been holding near historic lows this year and the US economy added an average of 209,000 jobs a month in the first quarter. The four-week moving average, which smooths out week-to-week volatility, dropped by 1,500 last week to 265,000. With benign inflation and wages rising moderately as the improving labour market attracts both previously discouraged and new job seekers, the US central bank is unlikely to hike rates again before the second half of the year.
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