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  • Staff

April Inflation Eases Slightly but Remains Above Target, Posing Challenges for Rate Cuts

Inflation showed a slight decrease in April, offering some relief to consumers, although it remains too high to anticipate any immediate interest rate reductions.


The Consumer Price Index (CPI), which gauges the average change over time in the prices paid by consumers for goods and services, rose by 0.3% from March, according to the Labor Department’s Bureau of Labor Services. This increase was marginally lower than the 0.4% predicted by Dow Jones.


Looking at the year-over-year figures, the CPI saw a 3.4% increase, aligning with expectations.

When excluding volatile items such as food and energy, the core inflation rate also increased by 0.3% for the month and 3.6% over the past year, matching projections.


In other financial news from Wednesday, retail sales showed no growth from the previous month, contrary to the 0.4% rise that had been anticipated. These figures are adjusted for seasonal variations but not for inflation, indicating that consumer spending didn't keep pace with inflation.


For April, the inflation figures were significantly influenced by rises in shelter and energy costs.


Shelter expenses, a major concern for Federal Reserve officials hoping for a reduction in inflation this year, climbed 0.4% in April and have risen 5.5% over the past year. These increases are notably higher than the Fed's comfort zone, as it aims to bring inflation down to around 2%.


Energy prices increased by 1.1% over the month and were 2.6% higher compared to last year. Food prices remained steady month-over-month and saw a 2.2% increase from the previous year. Meanwhile, prices for both used and new vehicles, which had significantly impacted inflation during the peak of the Covid pandemic, declined by 1.4% and 0.4%, respectively.


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