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A key gauge of U.S. inflation in just a month has gone from being essentially nonexistent to something quite real.

Prices on consumer purchases excluding food and energy rose by 0.25% in April, the most since October 2017, a report from the Commerce Department's Bureau of Economic Analysis showed Friday. The monthly increase in the gauge, unofficially known as the "core" price index on personal consumption expenditures, also exceeded the 0.2% average forecast of economists in a survey by the data provider FactSet. 

Investors monitor this price index because it's the Federal Reserve's primary measure of inflation and thus serves as a crucial input when policymakers are deciding whether to raise or lower U.S. interest rates. Prices for food and energy are excluded from the index because they're more prone to big month-to-month swings; many products like crude oil and soybeans are actively traded in futures markets and thus are influenced by commodities speculators. 

Compared with a year earlier, the core index was up 1.6%, representing an acceleration from the March pace of 1.5% but still well below the Federal Reserve's goal of 2%. 

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Yet a monthly inflation rate of 0.25%, if sustained, would lead to a roughly 3% increase over the course of a full year.