+6.2% Without. Food and drink. There is energy. Year-over-year percent change The Consumer Price Index is a measure of consumer prices. +6.2% Without food. And energy. The Consumer Price Index has a year-over-year change.
Inflation moderated on an annual basis for the first time in months in April, but the 8.3 percent annual Consumer Price Index increase remained uncomfortably rapid, and a closely watched index that subtracts volatile food and fuel costs actually accelerated.
The pressures that have kept inflation elevated for months remain strong, a challenge for households who are trying to shoulder rising expenses and for the White House and Federal Reserve as they try to put the economy on a steadier path.
Inflation had climbed by an even quicker 8.5 percent in March, but is beginning to moderate. The first cooling in months was due to the fact that gas prices dropped last month and a statistical quirk. When inflation started to take off last spring, yearly price increases were measured against elevated price readings. The annual increases look less severe because of the high base.
The White House and Fed will get a positive talking point from the fact that annual inflation may have peaked. The good news is that the core price measure, which excludes food and gas, increased by 0.6 percent in April, faster than in March. As they try to gauge where inflation is headed, central bankers and economists watch that measure.
Policymakers have a long way to go to bring price increases down to more normal and stable levels, and Friday's report is likely to keep them focused on trying to slow inflation.
Brian Coulton wrote in a research note that there wasn't much to assure the Fed in this release.
The question is how much and how quickly price increases will come down. Many analysts expect to see slower price increases or even outright price cuts on many goods, but such forecasts look increasingly uncertain. The war in Ukraine and the lock downs in China could cause supply shortages for important products.
Matthew Luzzetti is an economist atDeutsche Bank.
There are some signs that supply shortfalls for used vehicles are easing, but chip shortages linger and companies continue to struggle to finish building vehicles, so the outlook for the car market remains unclear.
The price of used cars and trucks fell in April compared to the prior month, but less than in the prior month. Car parts increased in April after decreasing in March. After a lull, new car prices increased by 1.7 percent.
As rents climb rapidly and as worker shortfalls lead to higher wages and steeper prices for restaurant meals and other labor-intensive purchases, services prices are increasing quickly. Even if supply problems are solved, it could keep inflation elevated.
Rents increased by 0.6 percent in April from March, and a measure of housing costs that uses rents to estimate the cost of owned housing increased by 0.5 percent. The pickup in housing costs is a big deal because they make up a third of the inflation index.
Andrew Hunter, senior U.S. economist at Capital Economics, wrote after the report that domestic inflationary pressures remain strong.
The Fed is trying to keep inflation in check by raising interest rates.
After a full year of rapid price increases, household and investor expectations for future price increases have been creeping higher, which could help to perpetuate fast price gains as households and businesses adjust their behavior, asking for bigger raises and charging more for goods and services.
The Fed lifted their main policy interest rate for the first time in over a year in March, and followed that up with the biggest increase since 2000 at their meeting last week.
By making it more expensive to borrow money, officials hope to slow spending and hiring, which could help supply to catch up with demand. Inflation should come down as the economy returns to balance.
Central bankers hope that their policies will temper economic growth without actually pushing unemployment up or plunging America into a recession. Officials have acknowledged that letting the economy down gently will be difficult, and have suggested that they will be willing to cause economic pain if it is necessary to tackle high inflation.
All Rights Reserved © 2024
