The data supports the Biden administration’s messaging that the US economy has turned a corner, as it looks to quell consumers’ concerns about the impact of rising prices going into the likely rematch against former president Donald Trump.
The annual consumer price index (CPI) came in at 3.4 percent in April, down 0.1 percentage point from March, the Labor Department said in a statement.
This was in line with the median forecast of economists surveyed by Dow Jones Newswires and The Wall Street Journal.
Monthly inflation came in at 0.3 percent, slightly below expectations.
“Overall, price pressures remain elevated but are moving in the right direction,” High Frequency Economics (HFE) chief US economist Rubeela Farooqi wrote in a note to clients.
As well as being good news for the Biden administration, the CPI data also helps the US Federal Reserve, which has hiked interest rates to their highest level for 23 years in a bid to bring inflation back down firmly to its long-term target of two percent.
“We think the data support the case for a patient approach on policy decisions from the Fed going forward although the base case remains one of lower rates this year,” Farooqi from HFE said.
It marks the first month of slowing annual data since January, although both the annual and monthly figures remain too high — with some indexes actually increasing.
“The index for shelter rose in April, as did the index for gasoline,” the Labor Department said in a statement.
“Combined, these two indexes contributed over seventy percent of the monthly increase in the index for all items,” it added.
The gasoline index jumped by 2.8 percent from a month earlier, while shelter prices increased by 0.4 percent.
In more good news for US consumers, a widely-watched inflation measure excluding volatile food and energy prices also eased last month, rising at an annual rate of 3.6 percent, down from 3.8 percent in March.
This marked its lowest annual rate since April 2021, according to Labor Department data, and suggests the overall inflationary picture is moving firmly in the right direction.
The so-called “core” inflation index rose 0.3 percent in April from a month earlier, according to the Labor Department, also slightly lower than in March.
Source: AFP
