MercoPress. South Atlantic News Agency

Food and fuel push US inflation in first four months to 4.8%

United States consumer prices increased by 0.4% in April, down from 0.6% in March with prices of goods such as clothing offsetting higher petrol costs, according to the latest release from the US Labor Department.

Core inflation which does not include the volatile food and energy items was up 0.2% in April. The Labor Department release shows that food prices rose 0.4% but energy soared 2.4% (5.9% in March). Petrol prices were still putting an upwards pressure, albeit less intense, on the inflation figures, and climbed by 4.7% in April compared with a 10.6% jump in March. "The acceleration thus far this year was due to larger increases in the energy and food components," the Labor Department said. When looking at the first four months of the year, the inflation rate was 4.8% compared with 2.5% during the same period a year earlier. However, the core rate was less than a year earlier in the four month period, down at 2.2% from 2.6% in 2006. Following on this data analysts indicated that prices were being contained, --as had been anticipated by the Federal Reserve-- and would not prompt a change in interest rates. The Fed has kept rates unchanged at 5.25% for eleven months. In related news IMF Director General Rodrigo Rato forecasted that US growth would rebound in the second half of 2007 as investment begins to recover. Last September the IMF reduced US growth prospects for 2007 from 2.9% to 2.2% and again increasing to 2.8% in 2008.