US inflation rises: what the analysts said

Steven Wood, chief economist, Insight Economics

With energy prices 18.6pc above their year ago level, core consumer prices are 1.3pc above their year ago level and its trend year-over-year rate has been slowly rising. Strengthening final demands have eliminated any risk of deflation but still ample slack in the economy, ongoing financial deleveraging, fiscal austerity, and increased global uncertainty should help restrain any acceleration in inflation.

Dana Saporta, economist, Credit Suisse

With some of the supply disruptions in the auto industry, the need for automakers to provide incentives has diminished a bit, so we might see some upward pressure in the core coming from the auto sector. Core is up for the year. This is not enough to prompt an immediate response from the Federal Reserve but they're certainly watching this. It is still our view that when QE2 ends in June the next move from the Fed will be a tightening move.

James O'Sullivan, chief economist, MF Global

The real story is that core is edging up. There is a clear acceleration in the core number in recent months. The bottom line is moving back up where the Fed would want to see it. Clearly the core number has moved away from the deflation zone in the past six months. It's just a matter of time when the Fed will tighten. Real hourly earnings have crimped real consumer spending, which rose at a 2.7 annualized rate in the first quarter. Higher gasoline prices were offset by a drop in payroll tax. We should get some relief in real spending from lower gasoline prices.

Nicholas Colas, chief market strategist, The Convergex Group

People are happy inflation data are broadly in line with expectations. There's been a lot of concern about what commodity prices were going to do to inflation. This is not a great number but still in line with prior expectations.

David Sloan, economist, IFR Economics

Before rounding the core rose by 0.1854pc, a number that can still be seen as acceptably subdued, even if there has been some acceleration in core CPI from the very low late 2010 levels. Food and energy remain firm but were less so in April, and April should prove a short-term peak in energy... This is the fifth straight month that overall CPI has outpaced the core but that string should break in May given a peaking in oil and continued negative seasonal adjustments. The yr/yr headline of 3.2pc is the highest since October 2008, but the acceleration is probably now close to a short-term peak. Fading worries about headline inflation will put focus on the core.

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