Consumer prices volatile

Consumer prices in Utah were volatile in April, thanks to hikes in transportation, groceries and utilities, according to a report released Wednesday by Wells Fargo Bank.

Nationally, the waters were calmer, with prices rising 0.5 percent. Food and energy prices also figured into the broader increase.

The combination of the relatively benign national inflation reading and falling oil prices sent stock markets skyrocketing Wednesday. The Dow rose 132.57, or 1.28 percent, to close at 10,464.45. The Standard & Poor's 500 index closed up 11.76, or 1.00 percent, at 1,185.56, and the Nasdaq composite index rose 26.50, or 1.32 percent, to 2,030.65.

The Wasatch Front Cost of Living Report from Wells Fargo found that prices were up 1.3 percent in April, led by a 3.2 percent hike in transportation costs, a 2.5 percent increase in groceries and a 6 percent rise in the price of utilities.

Clothing prices dropped nearly 5 percent, while housing prices saw a 0.6 percent bump. All other categories remained stable, according to the report.

Sterling Jenson, senior managing director for Wells Capital Management in Salt Lake City, attributed both the food and utilities increases largely to seasonal factors. The 4.8 percent drop in clothing prices was more mysterious, Jenson said, but likely linked to the low cost of labor and manufacturing overseas.

Nationally, the much-watched Consumer Price Index fell 0.1 percent to 0.5 percent last month, according to a U.S. Labor Department report. Excluding energy and food prices, which can swing widely from month to month, "core" inflation was flat in April. That's a big improvement from March, when core inflation shot up by 0.4 percent, the largest advance in 2 1/2 years.

"This is telling us that much feared inflationary pressures are moderating," said Anthony Chan, senior economist at JP Morgan Asset Management. "This is very, very encouraging."

The flat reading on core inflation, which is closely monitored by the Fed, was the best showing since November 2003. And, although the overall inflation reading of 0.5 percent in April was slightly higher than the 0.4 percent rise that economists were forecasting before the release of the CPI report, core inflation was better than the 0.2 percent uptick that analysts were expecting.

Energy prices jumped by 4.5 percent last month, the Labor Department reported. That was up from a 4 percent gain in March and represented the biggest advance since March 2003. Gasoline prices in April went up by 6.4 percent, natural gas prices rose 5.6 percent and fuel oil increased 4.6 percent.