A big jump in gasoline prices helped push the consumer price index up a seasonally adjusted 0.6 percent in April, ending a remarkable string of eight months in which the CPI rose an average of less than 0.1 percent a month, the Labor Department reported yesterday.
The 4 percent increase in gasoline prices was only part of a broader rise in prices last month. Food, shelter and medical care costs all rose 0.5 percent, and the category of other goods and services increased 0.7 percent. Only entertainment prices, which fell 0.1 percent, behaved better than in March.
Martin S. Feldstein, chairman of the Council of Economic Advisers, sought to head off fears that the April figures indicate the country is off to the inflation races again.
In a statement issued at the White House, Feldstein noted that the April price rise was at an annual rate of slightly more than 7 percent, but said that "does not provide cause for alarm, and does not indicate a long-term upward shift in the inflation rate.
"A primary cause of the April CPI increase was the one-time boost in gasoline prices associated with the five-cent increase in the gasoline tax which took effect in April," Feldstein said. "Excluding energy, consumer prices rose at a 4.7 percent annual rate in April."
However, the CEA chairman said that rising oil prices could keep the CPI rising more rapidly for awhile, and added that "the rate of inflation is now somewhere in the 4 to 5 percent range. This represents extraordinary progress from the near-double-digit rates of inflation that we were experiencing just two years ago."
Many private analysts expect consumer prices to go up at a 4 percent to 5 percent annual rate for the remainder of the year.
A few, such as those at Wharton Econometric Forecasting Associates, do not expect inflation to be that high until late in the year.
Economist Daniel Ratajczak of Georgia State University's Economic Forecasting Project said the May CPI should be up about 0.5 percent.
"In subsequent months, actual declines in produce prices and the reappearance of some unseasonal weakness in petroleum prices are expected to slow CPI gains to the 5 percent range for the remainder of 1983," Ratajczak estimated.
Treasury Secretary Donald T. Regan told reporters he thinks energy prices will not rise for the remainder of the year.
Meanwhile, he said, "Wage settlements have been coming in at very modest increases, and productivity, as would be expected coming out of a recession, is up."
The combination of smaller hourly pay gains and rising output per hour worked "is making [increases in] unit labor costs very low by the previous decade's standards," Regan said. "Accordingly, I think we can look forward to reduced inflation over the next several years."
Even with their rise last month, gasoline prices still were 14.1 percent below their peak in March 1981, the department's Bureau of Labor Statistics said.
Petroleum refiners generally lost money in the first three months of the year and have been raising gasoline prices to return to profitability. They have been successful to the tune of six or seven cents a gallon, partly because gasoline inventories dropped sharply during the quarter as refiners and retailers anticipated a cut in world oil prices.
As inventories were being rebuilt to normal levels, markets were tight enough for the higher prices to stick.
During April, homeowners' costs rose 0.8 percent, and renters' costs went up 0.4 percent.
A 1.8 percent rise in natural gas charges more than offset declines in fuel oil and electricity prices, according to BLS.
Grocery store food prices increased 0.4 percent after shooting upward 0.9 percent in March. Fruit and vegetable prices were responsible for most of the slowdown. They went up a substantial 1 percent in April, but that was much smaller than the 4.4 percent increase the month before.
The 0.5 percent increase in medical care costs was the same as in March, and again well below, the 0.9 percent average monthly rise from the end of 1980 through February of this year.
The index for apparel and upkeep rose 0.2 percent, compared with a 0.1 percent decline in March.
The overall index rose to 293.4, up 3.9 percent from April 1982. That means that it took $293.40 to buy the same items that cost $100 in 1967. From April 1980 to April 1981, the CPI increased 10 percent. In the year ended in April 1982, it rose 6.6 percent.