WASHINGTON (AP) — Consumers likely paid more for gasoline and food last month. But those price increases may slow in the coming months.
Economists forecast that the Consumer Price Index rose 0.4 percent in April, just below the previous month's 0.5 percent rise. Excluding the volatile food and energy categories, the core index is projected to rise 0.2 percent.
The Labor Department is scheduled to issue the April report at 8:30 a.m.
The cost of oil, as well as corn, wheat and other agricultural commodities has risen sharply in the past year. Rising demand in fast-growing developing countries has pushed prices higher. Political unrest in the Middle East has also affected oil prices.
Higher raw materials costs have raised pressure on grocery stores, restaurants and other companies to pass the increases on to consumers. On Thursday, the Labor Department said that wholesale prices rose 0.7 percent in April. They have jumped 6.8 percent over the past 12 months — the highest in 2 1/2 years. Most of that gain reflected higher food and energy costs.
That's much higher than spike in consumer prices, which have risen only 2.7 percent over the year that ended in March.
A big reason for the difference is that many companies are eating the higher costs. With unemployment still high and wages stagnant, retailers and grocery stores are worried that customers can't afford to pay more.
But some companies say consumers must share the pain. Wendy's/Arby's Group Inc. said this week that more expensive beef, bacon and cooking oil means it will have to raise prices this year. And Tyson Foods boosted prices for beef, pork, chicken and its prepared foods 12 percent in the January-March quarter compared with last year.
Yet oil, corn and other grains have come down in price in recent days, raising hopes among economists that inflation pressures could cool in the coming months.
Federal Reserve Chairman Ben Bernanke has said for much of this year that the rise in food and gas prices would be temporary. The central bank has also said it is watching closely for any signs of inflation. Seven months ago, when the core index had risen only 0.6 percent in a year, the Fed was more concerned about falling prices. The October reading was the smallest increase since the index began in 1957.
Copyright 2011 The Associated Press.