Inflation rates around the US cooled in April, the first decline after a faster-than-ever price increase for the eighth straight month.
The Department of Labor reported that the Consumer Price Index, a broad basket of goods and services, rose 8.3% from a year earlier. report On Wednesday, it fell from an annualized 8.5% increase in March. Excluding food and energy prices, core inflation increased by 6.2% compared to last year.
The decline is smaller than economists had predicted, but it does suggest that the worst price hikes of the past year may have passed.
“It is possible that inflation peaked as the year-over-year data fell in April compared to March due to a base effect,” Jeffrey Roach, chief economist at LPL Financial, said in an email. “A slight easing of inflation will provide the slight boost we need in consumer confidence,” he said.
Food, housing and new car prices rose the most in April, while energy prices fell after rising in recent months. Used car prices fell for the third month in a row. Clothing has reversed the recent price surge.
Although inflation eased last month, April figures are the second-highest rate of price increases since the early 1980s and have put pressure on consumers in every way, outpacing wage increases.
And the continued rise in housing and airfare shows that consumer prices are still uncomfortably high. Airfare rose 18.6% in April, the largest monthly increase ever, according to data provider FactSet.
“Inflation peaks could be behind us, but today’s CPI report shows a long, slow decline, or around 8%, until prices start to fall sharply,” said Robert Frick, corporate economist at the Navy Federal Credit Union. It points to the stabilization of the on a note.
Americans resumed spending in mid-2021 after a year of pandemic lockdown, rapidly driving up commodity prices, including food, furniture and automobiles. Prices have continued to rise due to transport disruptions caused by the coronavirus, and Russia’s war in Ukraine this year risks further disrupting markets for fuel, wheat and other commodities.
Inflation became an urgent political challenge for President Joe Biden, who on Tuesday declared “the biggest problem facing families today” and his “domestic top priority.”
Biden said his administration would help mitigate price hikes by reducing the government’s fiscal deficit and boosting competition in industries like meat packaging, dominated by some giants.
The Associated Press contributed to the report.