Rising energy prices continued to push consumer prices higher in April, with the Bureau of Labor Statistics (BLS) release of the Consumer Price Index (CPI) for All Urban Consumers showing a 0.4% (SA) increase in April—its tenth consecutive increase. Over the last 12 months, the all items index is up 3.2% (NSA).

The energy price index was up again, increasing 2.2%, as gasoline prices continued to rise.  Gasoline prices were up 3.3%, accounting for almost half of the increase in the all items index in April. The energy index has risen 19.0% in the past twelve months, with the gasoline index up 33.1% since April 2010. 

Food prices rose 0.4% for the month and were up 3.2% from a year earlier. Core CPI which excludes the volatile food and energy prices rose a modest 0.2% in April.  Year-over-year, core CPI is up a moderate 1.3%.

Housing’s component of the CPI, the shelter index, rose a modest 0.1% in April, maintaining a steady rate of growth (albeit modest) that began in October 2010. The rental component, rent and owner’s equivalent rent, also rose 0.1%. Over the last 12 months, the shelter index has risen 1.0% and the rental index is up 1.8%.

Gasoline prices peaked at the end of April, with the price of West Texas Intermediate (WTI) falling from $113 per barrel in the last week of April to $100 per barrel in the first week of May. They subsequently crept back above $100 per barrel in the second week of May.  We expect the price of WTI to remain relatively stable around $100 per barrel through the remainder of 2011. Thus, while gasoline prices will no longer be pushing the CPI higher, they will not support an easing of consumer prices either.

With the recent energy driven gains, the NAHB expects the CPI for All Urban Consumers to increase by 3.1% in the second quarter of 2011 and then to settle back to moderate growth of 1.3% in the second half of the year. Inflation is expected to remain moderate through 2012, with an annual rate of growth in the CPI of 1.5%.