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A pair of economic reports released on Wednesday offered better news about the U.S. economy than analysts had expected, and supported Tuesday’s action by the Federal Reserve.

Consumer prices rose less than expected in April, as the largest decline in clothing prices in 52 years helped to offset rising gasoline and tobacco prices.

The Labor Department said the consumer price index (CPI), the most closely watched gauge of U.S. inflation, rose 0.3% in April, following a 0.1% gain in March. Experts had been predicting a 0.4% rise.

Inflation can not only push up overall operating costs for trucking companies, but if overall U.S. inflation rates rise too fast, it will inhibit the Fed from cutting interest rates any further. That, in turn, would delay a return to strong growth in freight shipments that trucking companies need after months of weak freight demand.

Also Wednesday, the Commerce Department said U.S. home construction rose 1.5% in April to an annual pace of 1.609 million units. Analysts were expecting housing starts to decline 0.8%.

Any rise in the number of homes being built increases current trucking shipments of construction materials, and will lead to increased demand for freight such as household appliances and furniture in the future.

Labor said that the “core” rate of inflation, which is prices for goods other than food and energy, rose 0.2% in April for the second month in a row.

So far this year, consumer prices are rising at a rate of 3.8%, compared with a 3.4% increase for all of last year. However, this pickup mostly reflects higher energy prices, which have risen because of production limits and strong demand, Reuters reported.

Since inflation is not a major concern, it has given the Fed the ability to cut interest rates to boost the economy. On Tuesday, it slashed rates for the fifth time this year (See story, May 15).

And with mortgage rates at their lowest point in two years, it has helped keep home builders busy in recent months, despite the sluggish economy.

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