11/05/2023
Consumer prices in the United States rose again in April, and measures of underlying inflation stayed high, a sign that further declines in inflation are likely to be slow and bumpy. Prices increased 0.4% from March to April, the government said, up from a 0.1% rise from February to March. Compared with a year earlier, prices climbed 4.9%, down slightly from March’s year-over-year increase. Even with price pressures rising in April, the latest data did provide some evidence of cooling inflation. Grocery prices fell for a second straight month. And the cost of many services, including airline fares and hotel rooms, plunged. Though apartment rents rose in April, they did so more slowly than in previous months.
Compared with a year ago, core inflation rose 5.5%, just below a year-over-year increase of 5.6% in March. “This is a story of still-sticky core inflation at an elevated level,” said Blerina Uruci, chief U.S. economist for fixed income at T. Rowe Price. "This report puts the Fed on track to keep rates high this year.” For everyday consumer items, the inflation report was mixed. Gasoline prices jumped 3% just in April. By contrast, grocery prices dropped for a second straight month. Used car prices surged 4.4% after nine months of declines. Airline fares, though, dropped 2.6% in April, and hotel prices plunged 3% after four straight monthly increases.
For more than two years, high inflation has been a significant burden for America’s consumers, a threat to the economy and a frustrating challenge for the Fed. The central bank has raised its key interest rate by a substantial 5 percentage points since March 2022 to try to drive inflation back down to its 2% target. Besides making borrowing far more expensive for consumers and businesses, those higher rates have contributed to the collapse of three large banks in the past two months and to a likely pullback in bank lending. The result could be a further weakening of the economy.
Read more: https://yhoo.it/3puCssD
✍️: AP
📷️: Allison Dinner/AP
