Prices paid by consumers in the U.S. increased to open the second quarter to reach the highest annual gain in more than a year, although inflation remained well within the official target range, according to Reuters. On Friday, the Commerce Department reported that the consumer price index increased 0.4% in April, which was in-line with economists’ forecast after a 0.5% increase in March. Core prices were up 0.2% in April, quickening from the 0.1% increase the prior month, which brought the year-over-year core CPI increase to 1.3%, which is the most since February 2010.
The official target for core price inflation set by the Federal Reserve is near 2%, so the increase “is not enough to prompt an immediate response from the Federal Reserve,” according to Dana Saporta of Credit Suisse. The central bank still has an active program of $600 billion in bond purchases that is set to expire in June, and Saporta said that once the stimulus ends, “The next move from the Fed will be a tightening move.” The overall CPI was up 3.2% year-over-year on surging gas prices, which marks the highest annual increase in over two-and-a-half years.