Inflation refused to significantly ease despite the Federal Reserve’s efforts to rein in high prices, according to the latest Bureau of Labor Statistics (BLS) inflation report released on Wednesday.
The Consumer Price Index (CPI), a broad measure of the prices of everyday goods such as energy and food, increased 4.9% on an annual basis in April compared to 5% in March, according to the BLS. Core CPI — which excludes energy and food — remained high, rising 5.5% year-over-year in April, compared to 5.6% in March.
The increase was driven primarily by a rise in shelter costs, which jumped 0.4% in April compared to 0.6% in March, according to the BLS. Inflation grew 0.4% on a monthly basis in April, compared to 0.1% in March, according to the BLS. (RELATED: Core Inflation Still Sky High, New Report Shows)
The index for used cars and trucks increased 4.4% and the index for motor vehicle insurance rose 1.4%, according to the BLS. The indices for recreation, household furnishings and operations and personal care also increased.
The energy index decreased 5.1% over the 12 months ending in April while the food index increased 7.7% for the last year.
Inflation reached 9.1% in June 2022, its highest point since 1982, according to the BLS.
WASHINGTON, DC – MAY 03: Federal Reserve Board Chairman Jerome Powell delivers remarks at a news conference following a Federal Open Market Committee meeting on May 3, 2023 in Washington, DC. The Federal Reserve announced a 0.25 percentage point interest rate increase bringing the key federal funds rate to more than 5%, a 16-year high. (Photo by Anna Moneymaker/Getty Images)
“The direction of inflation is getting less bad, but pace of improvement is still frustratingly slow,” Bill Adams, chief economist for Comerica Bank told Morningstar.
“Inflation has stayed higher for longer than the conventional forecasting techniques would lead us to believe, and so the risk is that the persistence of inflation continues,” he said. “That’s another way of saying that once inflation has picked up, it’s hard to slow down again. And that’s where we are now.”
The CPI report follows an unexpectedly hot jobs report on Friday as the U.S. added 253,000 jobs in April, and the unemployment rate dropped slightly to 3.4%, according to BLS data.
“We remain committed to bringing inflation back down to our 2% goal and to keep our longer-term inflation expectations well-anchored,” Federal Reserve Chair Jerome Powell, who has raised interest rates ten consecutive times in an attempt to lower inflation, said Wednesday in a press conference following the Federal Open Market Committee (FOMC) meeting. “Reducing inflation is likely to require a period of below-trend growth and some softening of labor market conditions.”
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