The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1% in April on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, inflation declined 0.2%.

Falling energy prices were a key factor in April’s mild inflation. Gasoline prices, for example, fell -1.7% after rising in the two previous months. Gas prices are down -31.7% over the last 12 months. Fuel oil prices were down a very strong -8.4% in April, the BLS reported. Balancing off those declines were increases in medical care services (0.9%), shelter (0.3%) and used cars and trucks (0.6%). Overall food prices were unchanged in April.

Core inflation – which strips out energy and food – was up 0.3%, its largest increase since January 2013. Core inflation is up 1.8% over the last 12 months.

Holders of TIPS and I Bonds are also interested in non-seasonally adjusted inflation, which is used to determine the principal adjustments for TIPS and future interest rates for I Bonds. In April, the inflation index rose 0.2% to 236.599, but over the last 12 months inflation was negative at -0.2%.

I have updated my Tracking Inflation and I Bonds page to reflect these new numbers.

Although overall inflation remains very muted, April’s core inflation number could give the Federal Reserve something to ponder. The Fed adopted a 2% inflation target in April 2012. Core inflation of 1.8% is approaching that number, but I still can’t see the Fed acting to raise short-term interest rates in the near term.

Here is the inflation trend for the last 12 months: