U.S. retail inflation recorded its biggest increase in more than three years in April as gasoline and rents rose, pointing to a steady buildup that could give the Federal Reserve ammunition to raise interest rates later this year.
The U.S. Labor Department said on Tuesday its Consumer Price Index increased 0.4% last month, the largest gain since February 2013, after rising 0.1% in March. That took the year-on-year increase in the CPI to 1.1% from 0.9% in March.
Medical care and food prices also rose. Economists had forecast the CPI gaining 0.3% last month and advancing 1.1% from a year ago.
The so-called core CPI, which strips out food and energy costs, rose 0.2% after climbing 0.1% in March. In the 12 months through April, the core CPI increased 2.1% after increasing 2.2% in March.
The Fed has a 2% inflation target and tracks an inflation measure which is currently at 1.6%
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