Gas prices drive up inflation in April

A whopping increase in gasoline prices drove up inflation 2.5 percent last month in the metropolitan area compared with a year earlier, according to a report released Friday.

The federal Bureau of Labor Statistics said prices grew faster year-over-year in April than at any time since October 2008, when they climbed 4.3 percent in the 31-county region that includes Long Island.

Inflation rose 0.4 percent last month compared with March.

Gas was the main culprit, said Michael L. Dolfman, regional commissioner of the federal Labor Department, which encompasses the bureau. Pump prices were up 34.4 percent year over year, and 7.7 percent from March.

On the boardwalk in Long Beach Friday, consumers vented their frustration at the cost of gas. Michael Schwartz, 65, said he wasn't seeing his children and grandchildren in New Jersey and Pennsylvania as often. The Island Park resident said, "I keep hoping gas will fall, but so far that seems to be a pipe dream."

While gasoline spiked, the cost of electricity and natural gas used in homes fell 9 percent and 3.6 percent, respectively, in April compared with a year earlier.

Restaurant and takeout meals cost 2.2 percent more while groceries were up 2 percent.

Excluding energy and food, the regional Consumer Price Index rose 1.4 percent in the past year. Health care expenses gained 2.7 percent; apartment rents, 2.4 percent and clothing, 1.1 percent.

"What you're seeing here is the increase in the cost of gasoline affects all sectors of the economy," said Pearl Kamer, chief economist for the Long Island Association business group.

Kamer and others doubted pump prices would fall significantly in coming months because of more demand from China, India and other industrializing nations. "You didn't have this in 2008 and before when gas prices soared," Kamer said.

Shoppers appear to be opening their wallets more. The state Taxation and Finance Department said Friday that sales-tax receipts on Long Island rose 3.9 percent last month compared with 2010. The cash flowing to Suffolk County increased 6.5 percent and to Nassau County, 1 percent.

The increase in the regional price index was less than the national index, which gained 3.2 percent. That also was the fastest year-over-year rate since October 2008.

Ryan Wang, an economist at HSBC Securities USA, said gasoline prices may have peaked "at least in the near term," given recent declines in oil prices. He also doubted the Federal Reserve Bank would change interest rates to combat inflation. The Fed does not include gas and food expenses when measuring inflation.