US CPI rises lower than expected, advances 3.4% in the 12 months through April

US consumer prices rose lower than expected with consumer price index (CPI) rising 0.3% in April after moving up 0.4% in March, according to data from the Labor Department's Bureau of Labor Statistics. In the 12 months through April, the CPI rose 3.4%, down from 3.5% in March.

Core CPI, which excludes food and energy prices, rose 0.3% in April and was up 3.6% year-on-year, thereby registering the smallest annual gain since April 2021.

Retail sales remained flat in April, following a 0.6% increase in March. Core retail sales, which exclude automobiles, gasoline, building materials and food services, fell 0.3% after witnessing a 1% increase in March.

In April, the cost of shelter rose 0.4%, gasoline prices surged 2.8%, while food prices remained unchanged. Prices at the supermarket declined 0.2%, with egg prices falling 7.3% and price reductions seen across meat, fish, fruits, vegetables and non-alcoholic beverages. However, cereals and bakery products became expensive, as did dairy products, though marginally.

The Federal Reserve has kept its benchmark overnight interest rate in the 5.25-5.50% range since July after raising it by 525 basis points since March 2022.

Powell also said he did not anticipate the central bank's next move to involve an interest rate hike. Instead, he said that it was more probable that interest rates would remain unchanged, within the range of 5.25% to 5.50%, for a longer period than anticipated.