MercoPress. South Atlantic News Agency

US food prices in April soar at fastest rate in 18 years

United States food prices jumped at the fastest pace for 18 years in April, but consumer price inflation still eased. Consumer prices increased 0.2% in the month, down from March's figure of 0.3%, even though food costs jumped by 0.9%, according to Labor Department figures.

The 0.9% increase was boosted by higher prices for bread, milk, coffee and fruit, among other items. Falling prices in categories such as household furnishings and transport helped offset food prices. Energy costs were flat, as gasoline prices were down 2% but natural gas prices rose by 4.8%. But with oil prices hitting 127 US dollars a barrel there are concerns that there may be more severe inflation to come. Slowing inflation means that the Federal Reserve is more likely to be able to cut interest rates again. The annual rate of inflation came in at 3.9%, which was slightly lower than had been expected. Core inflation, which excludes food and energy prices, rose 2.3% in the year to the end of April. Meantime the US dollar slipped on US April inflation figures considered more benign that markets had expected. Recent speeches from some US Federal Reserve members and evidence of rising global energy and food prices had sparked speculation the figure would be higher and that in this scenario the Fed would be forced to raise interest rates before the end of this year.