Inflation Cools Slightly in April, Still Remains Elevated
Consumer Price Index Rises 0.3% Month-over-Month, 3.4% Year-over-Year
Key Points:
- Consumer Price Index (CPI) increased 0.3% in April, down from 0.4% in March.
- Annual core CPI gain was 3.6%, the smallest in three years.
- Housing costs remain the biggest component of inflation, while motor vehicle prices also contribute.
- Consumer inflation rose 3.4% in April from a year earlier.
The Labor Department reported this morning that the April 2024 Consumer Price Index (CPI) rose by a softer-than-expected 0.3% month-over-month (MoM) and 3.4% year-over-year. This represents a slight slowdown in inflation compared to March, when the CPI increased 0.4% MoM and 3.5% YoY.
The CPI measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods. The core CPI, which excludes food and energy prices, rose 0.3% in April, bringing the annual gain down to 3.6%. This is the smallest annual increase in core inflation since February 2021.
Housing costs remain the biggest component of inflation, with shelter costs rising 0.5% in April. Motor vehicle prices also contributed to inflation, with used car and truck prices rising 0.6%.
While the April CPI report shows a slight cooling of inflation, it is still well above the Federal Reserve's target of 2%. The Fed has begun raising interest rates to combat inflation, and further rate hikes are expected in the coming months.
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