A highly anticipated report released by the Labor Department on Wednesday showed the annual rate of U.S. consumer price growth slowed by less than expected in the month of April.

The Labor Department said consumer prices in April were up by 8.3 percent compared to the same month a year ago.

While the annual rate of growth slowed from a 40-year high of 8.5 percent in March, economists had expected the pace of growth to slow to 8.1 percent.

Energy prices skyrocketed by 30.3 percent year-over-year, while food prices spiked by 9.4 percent, reflecting the largest yearly increase since the period ending April 1981.

The annual rate of growth in core consumer prices, which exclude food and energy prices, also slowed to 6.2 percent in April from 6.5 percent in March, although the rate was expected to decelerate to 6.0 percent.

Prices for shelter and medical care jumped 5.1 percent and 3.2 percent, respectively, while prices for used cars and trucks and new vehicles also showed notable yearly increases.

The report showed prices for airline fares also soared 33.3 percent over the last year, reflecting the largest 12-month increase since the period ending December 1980.

On a monthly basis, the Labor Department said its consumer price index rose by 0.3 percent in April after surging by 1.2 percent in March. Economists had expected prices to edge up by 0.2 percent.

The relatively modest monthly price growth came as energy prices tumbled by 2.7 percent in April after spiking by 11.0 percent in the previous month.

The Labor Department said prices for gasoline plunged by 6.1 percent over the month, offsetting increases in prices for natural gas and electricity.

Meanwhile, the report showed prices for food advanced by 0.9 percent in April after jumping by 1.0 percent in March.

Excluding food and energy prices, core consumer prices climbed 0.6 percent in April after rising by 0.3 percent in March. Core prices were expected to increase by 0.4 percent.

The bigger than expected increase in core prices was partly due to an 18.6 percent surge in prices for airline fares, which reflected the biggest one-month spike since the inception of the series in 1963.

Notable increases in prices for shelter and new vehicles also contributed to the core consumer price growth along with higher prices for medical care, recreation, and household furnishings and operations

On the other hand, the Labor Department said prices for apparel, communication, and used cars and trucks all declined over the month.

"Overall, the April data will probably strengthen the Fed's resolve to continue hiking rates by 50bp at the next couple of meetings - and could lead to renewed speculation about a 75bp hike or an inter-meeting move," Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "But with goods shortages tentatively easing and signs that wage growth is set to cool, we still think a more pronounced drop back in inflation will allow officials to slow the pace of tightening in the second half of the year."

On Thursday, the Labor Department is scheduled to release a separate report on producer price inflation in the month of April.

Economists currently expect producer prices to rise by 0.5 percent in April after jumping by 1.4 percent in March, while the annual rate of growth is expected to slow to 10.7 percent from 11.2 percent.

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