US inflation eases, but still hovers near 4-decade high
Consumer prices up 8.3% in April from a year ago, government report says
WASHINGTON — Inflation eased slightly in April after months of relentless increases but remains near a four-decade high, imposing a continuing financial strain on American households.
Consumer prices jumped 8.3% last month from a year ago, the government said Wednesday. That was below the 8.5% year-over-year surge in March, which was the highest since 1981. On a monthly basis, prices rose 0.3% from March to April, the smallest rise 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 twice as much from March to April as they did the previous month. The increases were fueled by spiking prices for airline tickets, hotel rooms and new cars. Apartment rental costs also kept rising.
Those price jumps “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.
Even if it moderates, inflation will likely remain high well into 2023, economists say,
leaving many Americans burdened by price increases that have outpaced pay raises. Especially hurt are lower-income and Black and Hispanic families, who on average spend a greater proportion of their incomes on gas, food and rent.
Wednesday’s report also underscored the challenges for the Federal Reserve and White House in their struggles to tame inflation.
In April, a fallback in gas prices helped slow overall inflation. Nationally, average prices for a gallon of gas fell to as low as $4.10 in April, according to AAA, after having spiked to $4.32 in March. But since
then, gas prices have surged to a record $4.40 a gallon.
Grocery prices, too, are still soaring, in part because Russia’s invasion of Ukraine has heightened the cost of wheat and other grains. Food prices rose 1% from March to April and nearly 11% from a year ago. That year-over-year increase is the biggest since 1980.
There are, though, signs that supply chains are improving for some goods. Wednesday’s report showed that prices for appliances and clothing both fell 0.8%, while the cost of used cars dropped 0.4%, the third straight month of decline. Used cars and other goods drove
much of the initial inflation spike last year as Americans stepped up spending after vaccines became widespread.
Wednesday’s figures will keep the Federal Reserve on track to implement what may become its fastest series of interest rate increases in 33 years, economists said. Last week, the central bank raised its benchmark short-term rate by a half-point, its steepest increase in two decades.
The Fed under Chair Jerome Powell is seeking to pull off the notoriously difficult — and risky — task of cooling the economy enough to slow inflation without causing a recession.