Consumer prices rise 0.4% in April

Person pulls debit or credit card from wallet.

JEREMY HOBSON: Now let's come back to the United States and talk about this morning's data on consumer prices. They were up four-tenths of a percent last month.

Chris Low is chief economist with FTN Financial. He joins us live as he does every Friday. Good morning, Chris.

CHRIS LOW: Good morning.

HOBSON: So this slight rise in Consumer Prices -- we've been seeing this for many months. Is this the same old gas and food prices are going up story?

LOW: Yeah unfortunately it's a broken record but it's absolutely what it is. Excluding those prices we're up 0.2 percent, but boy those gas prices especially just keep rising every month.

HOBSON: And yet, Chris, gasoline futures plunged this week. Investors who invest in gasoline -- those prices went down. What does that say?

LOW: Well, that's right. Earlier this week, the Department of Energy reported a rise in gasoline inventories. It was a big surprise because there's a bunch of refineries down in Texas that are suffering from rolling blackouts which means for inventories to be up, people are buying less. That means a change in consumer behavior. It means this price increase is having an effect on economic activity.

HOBSON: And I have you say, when we talk about prices going up, up, up and then all of a sudden going down again, it reminds of me 2008 right before the financial crisis. Isn't that what happened with oil prices then?

LOW: It is, but I don't think it plays out the same way this time. And the reason is, you'll notice futures are down big this week, that's because speculators are backing away. They're just not willing to play this same kind of brinksmanship games they did last time. Partly because they lost their shirts in '08.

HOBSON: They sure did, and a lot of other people too. Chris Low, chief economist with FTN Financial, thanks so much.

LOW: Thank you.

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