Here comes the Consumer Price Index ...

The Bureau of Labour Statistics will release its monthly Consumer Price Index (CPI) at 8:30 a.m. ET.

Economists forecast that the basket of consumer goods, which reflects price changes, rose by 0.2% in April from March, according to Bloomberg. Compared to the prior year, they forecast a 2.3% increase.

When the volatile costs of food and energy are excluded, so-called core retail sales are forecast to have increased by 0.2% month-on-month, and 2% year-on-year.

CPI is a gauge of inflation, but the Federal Reserve prefers to use the personal consumption expenditures price index, which tracks what consumers actually buy more comprehensively.

Here’s a preview of CPI from Wells Fargo’s Sam Bullard:

Consumer prices fell in March for the first time in more than a year, largely due to a drop in gasoline prices. Also contributing to the soft March reading was a 0.1% drop in the core index, the first monthly decline in more than six years. An unusually large drop in the cost of wireless telephone services was the prime culprit, as was an easing in shelter inflation. We expect both the headline and core indices to bounce back in April, keeping consumer inflation close to the Fed’s two per cent target.

More to come …

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