Prices paid by US consumers rose 0.5 percent in April, led by the biggest increase in energy costs in more than two years, and unexpectedly held steady when food and energy are excluded, a government report showed.

　　Last month's rise in the consumer price index followed a gain of 0.6 percent in March, the Labor Department said yesterday in Washington. Core prices, less likely to fluctuate because they leave out food and energy, failed to rise for the first time since November 2003. The median forecast called for a 0.2 percent increase in core prices.

　　Treasury securities rose, pushing down yields, after the report on core prices bolstered the view of Federal Reserve policy makers that inflation is under control. That will let the central bank keep raising the target interest rate in quarter-percentage-point steps, economists said.

　　The report is "a relief, but the data don't get the Fed off the hook," said Ian Shepherdson, chief US economist at High Frequency Economics Ltd in Valhalla, New York. "Rates are being raised to combat future inflation."

　　Prices for hotel stays and clothing fell after a March surge, yesterday's report showed. Airline tickets and food cost more than a month earlier.

　　Compared with a year earlier, core prices rose 2.2 percent, down from the 2.3 percent rise in March.

　　The median forecast in a Bloomberg News survey of 78 economists called for a 0.4 percent increase in the consumer price index.

　　All consumer prices were up 3.5 percent for the 12 months that ended in April, compared with a year-over-year gain of 3.1 percent the previous month.

　　So far this year, consumer prices are rising at a 4.8 percent annual rate compared with a 4.4 percent rate of increase at the same time last year. Core prices are rising at a 2.6 percent annual pace, same as this point last year.

　　Energy prices rose 4.5 percent in April, the biggest monthly gain since March 2003, after rising 4 percent a month earlier. Gasoline cost 6.4 percent more than in March, and natural gas cost 5.6 percent more.

　　Crude oil and gasoline are becoming less expensive this month amid signs that stockpiles are large enough to meet demand. The average pump price for a gallon of gasoline dropped to US$2.21 in the past week, the fifth straight decline from a record US$2.32 in mid-April.

　　"Pipeline price pressures are becoming less intense," Bruce Kasman, head of economic research at JPMorgan Chase Bank in New York, said before the report. "This should help temper retail goods inflation."

　　(Bloomberg News)