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Inflation rose slightly in April and remained above the Federal Reserve’s target rate as the economic impact of higher tariffs is expected to impact consumer prices in the coming months.
The Bureau of Labor Statistics on Tuesday said that the consumer price index (CPI) – a broad measure of how much everyday goods like gasoline, groceries and rent cost – rose 0.2% in April compared with last month, while it was up 2.3% on an annual basis. The annual inflation rate was the lowest since February 2021.
Both of those figures were slightly cooler than the estimates of economists polled by LSEG, who predicted a monthly figure of 0.3% and annual inflation of 2.4%. The rise in monthly inflation comes after an unexpected decline in March, when it fell 0.1%. Headline inflation was unchanged in April.
So-called core prices, which exclude more volatile measurements of gasoline and food to better assess price growth trends, were up 0.2% from the prior month, slightly cooler than expected, and 2.8% on an annual basis, in line with economists’ expectations. The headline figure was unchanged, while the monthly figure was up from a 0.1% increase a month ago.
The report showed that inflationary pressures in the U.S. economy remain persistent despite progress in bringing inflation closer to the Federal Reserve’s 2% target in recent years.
High inflation has created severe financial pressures for most U.S. households, which are forced to pay more for everyday necessities like food and rent. Price hikes are particularly difficult for lower-income Americans, because they tend to spend more of their already-stretched paycheck on necessities and have less flexibility to save money.
Food prices fell 0.1% in April and was 2.8% higher on an annual basis. The food at home index declined 0.4% for the month and 2% from a year ago, while food away from home was up 0.4% and 3.9% from last year.
Egg prices declined 12.7% in April, as the cooling trend continued after the industry saw rapid price growth last year due to an avian flu outbreak. The index for meats, poultry and fish was unchanged in April, while the dairy index declined 0.2%, the index for cereals and bakery products was down 0.5% for the month, and the fruits and vegetables index was down 0.4% for April.
This is a developing story. Please check back for updates.
