WASHINGTON (AP) - Consumers paid more for gas and food in April, pushing inflation to its highest level in two and a half years. But so far this month, inflationary pressures have begun to ease.
The Consumer Price Index increased 0.4 percent in April, the Labor Department said. In the past 12 months, prices have risen 3.2 percent. That's the biggest 12-month gain since October 2008.
Excluding volatile food and energy, prices ticked up 0.2 percent and have risen only 1.3 percent this year. That's double the gain posted six months ago, but still below the level the Federal Reserve considers a healthy pace of inflation.
Oil prices have fallen from their peak of $114 a barrel earlier this month to about $100 Friday. And the price of corn and other grains have also declined in recent days.
Economists say gas and food prices should retreat later this year. High prices are likely slowing the economy in the April-June quarter, but growth should pick up in the second half of this year, they say.
Gas prices rose 3.3 percent in April. That accounts for half last month's increase. They have soared more than 33 percent in the past year. Demand in fast-growing developing countries and political turmoil in the Middle East have caused oil prices to rise. Prices at the pump have since leveled off near $4, up $1.09 from last year.
Food prices increased 0.4 percent last month. That's half the previous month's increase, which was the largest in nearly three years. The price of fresh vegetables fell. Dairy, meat, fish and eggs all rose.
The cost of new and used cars, clothing, and medical care also increased, pushing up the core index.
Federal Reserve Chairman Ben Bernanke has said that the impact of higher food and gas prices should be temporary. The central bank has also said it is watching closely for any signs of inflation. Seven months ago, when the core index had risen only 0.6 percent in a year, the Fed was more concerned about falling prices. The October reading was the smallest increase since the index began in 1957.