Inflation remained uncomfortably high in April as the price of gasoline and rent spiked, continuing to squeeze Americans' pocketbooks.
The Labor Department said Wednesday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 0.4% in April from the previous month, much faster than the 0.1% increase recorded in March. Prices climbed 4.9% on an annual basis, slightly below the 5% increase forecast by Refinitiv economists.
Although inflation has cooled from a peak of 9.1%, it remains about more than double the pre-pandemic average and well above the Fed's 2% target rate.
Other parts of the report also pointed to a slow retreat for inflation, a worrisome sign for the Federal Reserve. Core prices, which exclude the more volatile measurements of food and energy, climbed 0.4%, or 5.5% annually. That is a slight drop from the 5.6% increase in March, but it marked the fifth straight month that core prices climbed 0.4% or more.
"Progress is being made in the Fed’s fight against inflation, but it’s slower than anyone would prefer," said Jim Baird, CIO at Plante Moran Financial Advisors. "Inflation should continue to ease in the coming months, but a return to the central bank’s 2% target could take much longer."
Here is a breakdown of where Americans are seeing prices rise the fastest – and where there has been some actual reprieve from higher inflation – as they continue to wrestle with the worst sticker shock in a generation:
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Shelter costs, which account for about 40% of the core inflation increase, rose 0.4% for the month and are up 8.1% over the past year.
It was the largest contributor to the monthly increase, the Labor Department said in the report.
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Rising rents are a concerning development because higher housing costs most directly and acutely affect household budgets. Another data point that measures how much homeowners would pay in equivalent rent if they had not bought their home also climbed 0.5% from the previous month.
However, experts noted that the Labor Department captures developments in shelter costs and market rents with a big lag. The latest data included in the April CPI report likely reflects the hot housing market in mid-2022.
"The housing component of CPI is largely representative of rental prices, which has a lag effect as renters typically lock-in their lease for long periods of time," said David Bahnsen, chief investment officer of the California-based Bahnsen Group. "Real estate prices across the board have declined considerably in recent months, and it's going to take a few more months for the CPI to reflect this decline."
Food has been one of the most visceral reminders of red-hot inflation for Americans, but in April, the cost of groceries declined for the second straight month.
Grocery prices edged down 0.2% over the course of the month, according to the data. On an annual basis, prices remain up 7.1% compared to the same time last year.
Despite the decline, consumers paid more for a number of items in April, with the price rising for cereal (0.1%), rice (0.1%), beef and veal (0.3%), ham (2%), chicken (0.5%) and fresh vegetables (0.3%) including lettuce (3.5%).
There were some substantial declines in food prices last month: The cost of eggs – which recently surged amid an outbreak of the avian flu, a highly contagious virus that often proves fatal for chickens – dropped 1.5% in April. However, the price of eggs is still up 21.4% when compared with the same time one year ago.
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The cost of coffee, citrus fruits, milk, pork, fish and seafood fell last month.
After declining for two months, energy prices reversed that trend in April and rose 0.6%, fueled by a 3% spike in the cost of gasoline.
Still, energy prices remain cheaper than they were one year ago. Gas prices are down about 12.2% compared with April 2022, when energy prices skyrocketed following Russia's invasion of Ukraine.
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The bump in gas prices came after OPEC+ – the coalition of oil-producing nations led by Saudi Arabia and Russia – unexpectedly announced that it would slash its crude output by 1.15 million barrels per day.
The average cost of a gallon of gas was about $3.53 on Wednesday, according to AAA, down about 2.5% from one month ago.
There was some good and bad news for Americans looking to buy a car in April.
Used car and truck prices, which have been a major component of the inflation increase, jumped 4.4% over the month. Prices remain down about 6.6% compared with a year ago.
However, the cost of new cars and trucks inched lower last month, falling 0.2% for the month. From the previous year, new car prices are up 5.3%.
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Airline fares fell in April for the first time in months, with prices dropping 2.6% from the previous month. Tickets are down about 0.9% compared with last year, according to the data.
