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The Labor Department's closely watched index for tracking inflation, the consumer- price index, rose a seasonally adjusted 0.7% in April and is now up 2.3% on an annualized basis.
The wider-than-anticipated increase was primarily due to a 6.1% surge in energy prices, the largest increase since the government started tracking that data in 1957. For the first four months of the year, energy prices were up by an annualized 24.5% in April. Year- over-year, prices were up 3%. Gasoline prices surged, advancing 15% in April.
Excluding energy and food, the consumer-price data revealed a slightly more benign inflation scenario, with the core consumer-price index rising 0.4% in April. The core CPI rose 2.2% from a year earlier.
Both inflation numbers were higher than anticipated, however. The median forcast of 16 economists surveyed by Dow Jones Newswires and CNBC called for a 0.4% boost in the CPI and a 0.2% rise in the core index.
In the previous month, the inflation picture was much more tame. The consumer-price index was up only 1.7% on an annualized basis in March, the Labor Department said, and many analysts and economists used the data to support the emerging theory of a new economy. According to this new paradigm, inflation and high employment can coexist as a result of higher productivity and technological innovation.
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