Inflation in April was 8.3% year-over-year, nearing its highest level in 40 years.


Inflation rose again in April, pushing consumers to the brink and threatening economic expansion, the Bureau of Labor Statistics reported Wednesday.

The Consumer Price Index, a broad measure of the price of goods and services, rose 8.3% from a year ago, beating the 8.1% gain expected by Dow Jones. This marked some easing from the March highs, but was still close to the highest level since the summer of 1982.

Excluding volatile food and energy prices, the so-called core CPI was still up 6.2% against expectations of a 6% rise.

Inflation was the single biggest threat to the recovery that started at the beginning of the pandemic, and in 2021 the economy recorded its largest single-year growth rate since 1984. While pumps and grocery store price increases were one problem, inflation extends beyond these two areas to housing, car sales, and many other areas.

Fed officials have responded to two rate hikes so far this year and promising further rate hikes until inflation hits the central bank’s target of 2%. But Wednesday’s data shows the Fed has big things ahead.

The month-on-month increase was also higher than expected. Headline CPI 0.3% vs expected 0.2%, core 0.6% up, 0.4% up.

These figures come despite a 2.7% decline in energy prices, including a 6.1% decline in gasoline prices. The BLS Food Index rose 0.9% in April to counter the energy slowdown. Unadjusted data showed that over a 12-month period, energy costs were still up 30.3%, while food was up 9.4%.

Adding to the worry is the continuing rise in housing costs.

The shelter index, which makes up about one-third of the CPI weight, increased an additional 0.5% consistent with gains over the past two months and rose 5.1% on an annualized basis, the fastest rise since March 1991.

Stock market futures reacted negatively to the report, turning positive early in the morning and then negative. Treasury yields rose, bringing the 10-year U.S. Treasury yield closer to 3.03%.

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