Consumer prices rose 0.2% in April 2008, the U.S. Labor Department announced Wednesday, a statistic below the consensus estimate as oil prices moderated during month, offsetting rising food prices.

Economists surveyed by Bloomberg News had expected April 2008 consumer prices to increase 0.3%. Consumer prices increased 0.3% in March 2008.

Also, the core rate, which excludes the frequently-volatile food and energy component, rose just 0.2% in April 2008, inline with the Bloomberg News survey 0.2% consensus estimate.

On a year-over-year basis, consumer prices have risen 3.9% and the core rate has risen 2.3%. The core rate remains slightly above U.S. Federal Reserve's 'comfort zone' for inflation. The Fed uses the core CPI rate as one of its primary gauges of consumer-based inflation.

April 2008 CPI: 'Surprisingly tame'

Economist David H. Wang said the April 2008 CPI report was a bit of a surprise -- one that may help the U.S. economy. "The report was surprisingly tame. We do see rising food costs, but the energy component was not as bad as expected," Wang said. "Also, core year-over-year inflation is not too bad, and the Fed [U.S. Federal Reserve] will look favorably upon this, if it remains moderate."

Wang said it was too soon "to read anything into the data" regarding the Fed's next move on interest rates. Many economists expect the Fed to keep its key, short-term interest rate the same at 2% when it meets next on June 29-30, 2008.

In April 2008, energy prices were flat, gasoline prices declined 2%, natural gas fell 4.8%, transportation costs declined 0.7%, food prices increase 0.9%, apparel climbed 0.5%, and medical costs rose 0.2%.

Economic Analysis: For the first time in many months, a decent CPI statistic. Inflation remains elevated, with core inflation above the Fed's 'comfort zone,' but given the doubling of oil prices in the past year and the myriad of ways rising energy costs can push up costs throughout the U.S. economy, it's a small wonder that inflation hasn't reached higher levels yet. At least initially, it appears consumers are economizing and businesses are thinking first before raising prices to pass on higher costs -- two factors that have to-date helped prevent prices at the retail level from rising more.