Wall Street Likes Latest News on Consumer Prices

Consumer prices in the United States rose again in April, and measures of underlying inflation stayed high, suggesting that rising costs could persist for months to come—but the annual increase came in a hair under what was expected, cheering investors. The major points:

• Prices rose 0.4% from March to April, up from 0.1% from February to March. Compared with a year earlier, prices climbed 4.9%, down slightly from March’s year-over-year increase and slightly below the Dow Jones estimate of 5.0% inflation, reports CNBC.
• The Fed is paying particular attention to so-called core prices, which exclude volatile food and energy costs and are regarded as a better gauge of longer-term inflation trends. Core prices rose 0.4% from March to April, the same as from February to March, reports the AP.

• Compared with a year ago, core prices rose 5.5%, just below a yearly increase of 5.6% in March.
• Unlike goods prices, the costs of services—from restaurant meals to auto insurance, dental care to education—are still surging. A major reason is that companies have had to raise pay in those industries to find and retain workers.
• Federal Reserve officials say that fast-rising wages, while good for workers, have contributed to higher costs in services industries because labor makes up a significant portion of those industries’ expenses.
• Last week, the Fed signaled that it might pause its rate increases, after imposing 10 straight hikes. After Wednesday's numbers came out, CNBC reports traders dropped the odds of a June hike by the Fed to 20%.
• The Dow was up 184 points, or 0.6%, on the news.

(More consumer prices stories.)