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Inflation eases despite food price jump

WASHINGTON — Consumer prices slowed in April despite the biggest jump in food costs in nearly two decades. But with oil near record levels, Americans should brace for more pain at the pump in the months ahead.

The Labor Department reported Wednesday that consumer prices edged up 0.2 percent last month, slightly lower than expected and better than the 0.3 percent rise in March.

The lower inflation reflected a flat reading for energy, which helped offset a 0.9 percent jump in food. That was the biggest one-month surge since a 1.5 percent increase in January 1990.

Last month's increase was driven by widespread increases in a number of areas, from bread, butter and margarine to milk and coffee. Food prices have been climbing rapidly over the past year, reflecting higher world demand and the effect of increasing energy prices on the cost of fertilizer and transportation of products to grocery store shelves.

For April, energy prices were unchanged and gasoline prices even fell by 2 percent, a decline that would strike motorists as strange, given that they have been watching the price of gasoline rise relentlessly in recent weeks.

However, since gasoline prices normally rise in April, the 5.6 percent increase in gasoline prices for the month was turned into a 2 percent drop after the government adjusted for normal seasonal variations — little comfort to people now paying pump prices that hit a new national record average of $3.758 per gallon on Wednesday, up nearly 40 cents in the past month.

In Ventura County and the greater Los Angeles area, consumer prices increased 0.5 percent in April, compared with a 1 percent gain in March. For the past year ending in April, inflation is up 3.1 percent.

Increases were reported in five of eight major spending categories, including transportation, 1.9 percent; clothing, 1.5 percent; other goods and services, 0.9 percent; food and beverages, 0.2 percent; and medical care, 0.1 percent.

There were no changes in recreation, education and communication and housing.

Piped natural gas, a subcategory under housing, stood out in April with a year-over-year jump of 27.8 percent and month-to-month gain of 4.5 percent. It exceeded gains in all other items, including gasoline increases of 14.6 percent from the previous year and 6.5 percent from March.

Local figures are not seasonally adjusted.

Nationwide, so-called core inflation showed a modest 0.1 percent rise in April, down from 0.2 percent in March, a performance that economists said should continue as the weakening economy and rising layoffs help keep the lid on price increases.

"The recent slowdown in the United States is definitely helping to contain inflation," said Rebecca Braeu, an economist at John Hancock Financial in Boston.

But analysts said many families are continuing to be squeezed.

"We are paying more to fill up our tank and buy a loaf of bread and a gallon of milk," said Mark Zandi, chief economist at Moody's Economy.com. "It's going to be tough to go to the grocery store this summer or drive to the beach."

Zandi said gasoline prices also likely will increase by a significant amount this month as pump prices reflect the recent run-up in crude oil prices, which remained above $124 per barrel on Wednesday.

The grocery industry urged Congress to revise current requirements designed to divert corn production to be used to make ethanol, which they blamed for pushing food prices higher.

"It's clear that American families are facing unbearable pressure, pressure that Congress can help relieve by revisiting and revising the mandated diversion of corn to ethanol production," said Scott Faber, vice president for federal affairs for the Grocery Manufacturers Association.

— Star staff contributed to this report.

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