The Department of Labor reported that the consumer price index increased by 0.3 percent in April from the previous month and by 3.4 percent compared to 12 months earlier. Economists had predicted the same increase in the month-to-month figure and over the 12-month period.
In March, the consumer price index rose by 0.4 percent compared to the prior month and by 3.5 percent from a year earlier. Core inflation, which excludes food and energy, also increased by 0.3 percent for the month and by 3.6 percent compared to a year ago.
Food prices remained steady in April compared to the previous month, with a 2.2 percent increase from a year earlier. Energy prices saw a 1.1 percent increase from the prior month, led by a 2.8 percent rise in gasoline prices. Prices for goods excluding energy decreased by 0.1 percent, with drops in new and used car prices, but an increase in car insurance and clothing prices. Services prices increased by 0.4 percent compared to March.
Inflation increased significantly in the first few months of the year, with core inflation rising at a 4.6 percent annual rate in the first quarter. Consumer inflation peaked at 9.2 percent in June 2022 but has since declined as the Federal Reserve raised interest rates rapidly to combat rising prices.
The Federal Reserve initially planned to cut rates three times this year, but the unexpected inflation reports in the early months of the year have led to a scaling back of rate cut expectations. Markets now anticipate just one or two rate cuts by the end of the year.
