May 15, 2024 - Economy

Inflation cooled in April as price gains slowed, CPI report says

Man in a grocery store looking at the meat section

A customer shops at a supermarket in Millbrae, Calif. Photo: Li Jianguo/Xinhua via Getty Images

The Consumer Price Index (CPI) rose 0.3% in April and the core measure that strips out food and energy increased by the same amount, the Labor Department said on Wednesday.

Why it matters: Inflation slowed for the first time this year, helping ease concerns that progress on moderating consumer prices had stalled out.

  • The report on Wednesday showed the overall consumer price index increased 3.4% over the last 12 months, compared to 3.5% in March.
  • Meanwhile, the core measure rose 3.6% in the year through April, versus the 3.8% the prior month.

Zoom in: The slight cooldown in price increases come after a stretch of data showing inflation had stopped slowing after big declines last year.

  • Then, signs that inflation was normalizing helped lift moods among American consumers that had been soured by big price increases for a slew of goods and services since mid-2021.

The intrigue: Federal Reserve officials had signaled intentions to lower interest rates they raised sharply in the wake of the inflation shock.

  • But since inflation stopped cooling, they have backed off those plans and admitted a "lack of progress" on slowing inflation.

State of play: While inflation looks like it will be more difficult to beat than previously thought, the economy has not wavered much.

  • But separate data on Wednesday showed retail sales were flat in April, while data in March was revised a tick lower to 0.6%, the Commerce Department said.

Editor's note: This is a developing story. Check back for updates.

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