Inflation slows in April, is still historically high
Falls to 8.3% from 8.5%, but core prices a worry
– Inflation slowed in April after seven months of relentless gains, a tentative sign that price increases may be peaking while still imposing a financial strain on American households.
Consumer prices jumped 8.3% last month from 12 months earlier, the Labor Department said Wednesday. That was below the 8.5% year-over-year surge in March, which was the highest since 1981. On a month-to-month basis, prices rose 0.3% from March to April, the smallest increase in eight months.
Still, Wednesday’s report contained some cautionary signs that inflation may be becoming more entrenched. Excluding the volatile food and energy categories, so-called core prices jumped 0.6% from March to April – twice the 0.3% rise from February to March. Those increases were fueled by spiking prices for airline tickets, hotel rooms and new cars. Apartment rental costs also continued to rise steadily.
The sharp price gains from March to April “make clear that there is still a long way to go before inflation returns to more acceptable levels,” said Eric Winograd, U.S. economist at asset manager AB.
Some individual categories of goods have skyrocketed over the past year. Grocery prices, for example, have shot up 10.8%, the largest year-over-year jump since 1980. The cost of a gallon of gas fell 6.1% in April but was still up nearly 44% from a year ago.
And so far in May, prices at the gas
pump have reached new highs. Nationally, the average for a gallon of gas is at a record $4.40, according to AAA. The high price of oil is the main reason. A barrel of U.S. benchmark crude sold for around $100 a barrel Tuesday. Gas had fallen to about $4.10 a gallon in April, after reaching $4.32 in March.
Beyond the strain for households, inflation is posing a serious political problem for President Joe Biden and congressional Democrats in the midterm election season, with Republicans arguing that Biden’s $1.9 trillion financial support package last March overheated the economy by flooding it with stimulus checks, enhanced unemployment aid and child tax credit payments.
On Tuesday, Biden sought to take the initiative and declared inflation “the No. 1 problem facing families today” and “my top domestic priority.”
Biden blamed chronic supply chain snarls related to the swift economic REWASHINGTON
bound from the pandemic, as well as Russia’s invasion of Ukraine, for igniting inflation. He said his administration will help ease price increases by shrinking the government’s budget deficit and by fostering competition in industries, like meatpacking, that are dominated by a few industry giants.
Previous signs that U.S. inflation might be peaking didn’t last. Price increases decelerated last August and September. But prices shot up again in October.
While food and energy have endured some the worst price spikes of the past year, analysts often monitor the core figure to get a sense of underlying inflation. Core inflation also typically rises more slowly than the overall price increases and can take longer to decline. Rents, for example, are rising at a historically fast pace, and there is little sign of that trend reversing anytime soon.