April retail sales were slightly softer than expected, at 0.4 percent versus a projection for 0.6 percent, and consumer inflation, at the core, was 0.1 percent, barely a pickup after a decline in March. Core inflation at the wholesale level, which excludes food, energy and trade services, was up 0.7 percent in April and 2.1 percent over 12 months.
While that was a slowdown from March's 2.4 percent increase, the year-on-year gain in the CPI was still larger than the 1.7 percent average annual increase over the past 10 years. Sales were up 4.5 per cent in April on a year-on-year basis.
Both the overall number and core inflation were up more sharply than analysts had been expecting.
The U.S. central bank lifted its short-term interest rate by a quarter of a percentage point in March and has forecast two more hikes this year.
"US inflation isn't responding yet to a tightening in labour markets, but might still be (barely) hot enough to keep the Fed on a tightening path", said Avery Shenfield of CIBC economics in response to the data.
Energy prices jumped 1.1% in April - the biggest increase since January- and were up 9.3% over the past year.
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The steady increase of inflation could support the Federal Reserve to raise rate next month.
Higher gasoline and heating gas costs helped lift the index, which rose after its first decline in more than a year.
The CPI showed rising prices for shelter, tobacco, energy and food, according to the Labor Department. The 12-month gain in the core index was also 1.9 per cent, falling a tenth of below the Fed's two per cent target.
About 40 percent of the increase in goods prices was due to gains excluding food and energy.
Stocks futures weakened on the reports, and Treasury yields, which move inversely to prices, fell. A third report on Friday showed consumer sentiment rose in early May as the outlook for wages improved.
Meanwhile, sales fell at grocery stores and clothing merchants. Owners' equivalent rent of primary residence rose 0.2%, matching March's increase. "Consumers stopped visiting auto lots in the first quarter because other retail sales were quite respectable", noted Chris Rupkey, chief financial economist at MUFG Union Bank.