Consumer Price Index’s Rise Probably Slowing

Before the Federal Open Market Committee decides what to do about interest rates Tuesday, investors will get news on whether there is any inflation at the consumer level. The consumer price index, which tracks prices Americans pay for goods and services, probably rose at a slower pace in April as world petroleum prices retreated from the year’s highs, analysts said. The CPI is likely to have risen 0.1% during April after increasing 0.7% in March. Outside of food and energy, the CPI probably rose 0.2% for the month after increasing 0.4% the previous month, they said. Other economic reports this week will show gains in U.S. manufacturing and housing, analysts said. Figures due today from the Fed could provide a case in point, if they ring in as strong as Wall Street estimates. Industrial production probably rose 0.8% in April as factories, mines and utilities raced to meet the demands of an expanding economy, analysts said. In February, output rose 0.3%. The plant-use rate, which measures the amount of industrial capacity in use, probably increased to 81.8% in April from 81.4% during March.

Housing is also sailing ahead, even after the Fed’s efforts to brake the growth rate with higher borrowing costs. Starts of new houses and apartments, in a report due Tuesday, probably advanced 2.9% during April to 1.650 million units at a seasonally adjusted annual rate, analysts said. Starts declined 11.2% in March. On Friday, the Commerce Department is expected to report that the trade deficit in goods and services is likely to have widened to $29.5 billion in March from $29.2 billion during February as imports poured in to meet consumer demand.