Inflation in the United States seems to have started to taper off, as the rapid cost of goods and services did not change much in April compared to March. Consumer prices rose by 0.3% in April after having risen by 1.2% in March, according to data the Bureau of Labor Statistics released on Wednesday.
In twelve months inflation to April grew 8,3% compared to 8,5% in March. However April’s core inflation measure — the change in the price of goods and services not including food and energy — was 0.6%, compared to 0.3% in March.
The numbers indicate that inflation, which has been sitting at a 40-year high since December, is showing signs of cooling off. But some experts warn that it may be too soon to tell how inflation evolves in a war scenario and with the economy still recovering from pandemic.
Households are still feeling the squeeze of rising prices. The largest increases for April were in airfares; food, including meat and bread; shelter; and new vehicles.
Airfares climbed nearly by 19% in the month. The research group Capital Economics noted that airfares have surged by nearly 35% over the past three months, reflecting higher fuel costs.
Although gasoline prices in April declined by 6.1% over the previous month, prices at the pump were already back at all-time highs this week, information not reflected in Wednesday's data release.
Economists said after the BLS report was released on Wednesday that they remain concerned that prices are not decelerating as rapidly as had been hoped.
“The pace of price increases moderated, but not as much as expected, Greg McBride, the chief financial analyst at group Bankrate.com.
The pickup in core inflation in April could mean the Federal Reserve will consider increasing interest rates more aggressively, said Andrew Hunter, a senior U.S. economist at Capital Economics. However with goods shortages tentatively easing and signs that wage growth is set to cool, we still think a more pronounced drop back in inflation will allow officials to slow the pace of tightening in the second half of the year.”