According to statistics released this week, consumer prices in the United States increased more quickly in April than they did the month before, despite modest stabilization in a less volatile measure of inflation.
Data on the Consumer Price Index for a twelve-month period that ended in April were made public by the U.S. Commerce Department. Almost double the 0.1% rise from February to March, total consumer prices increased by 0.4% from the previous month.
The U.S. Federal Reserve’s latest hike in lending rates was followed by the tilt upward. As long as inflation remains over the bank’s 2% goal rate, Fed Chair Jerome Powell last week increased the lending rate by 25 basis points, saying that he will monitor the data before making the next step.
The majority of the rise in consumer prices was caused by used cars and motor fuel, however, the latter is gradually declining as a result of slowing economic activity. Prices for groceries were unchanged from March to April.
The rate of so-called core inflation, which excludes costs for food and energy, remained constant at 5.5% from April to April of last year. That may allow for another rate increase.
Powell predicted that the economy would have challenges later in the second quarter.
He said last week that “activity in the housing market remains weak, largely due to increased mortgage rates. The slowdown in production growth and higher borrowing rates also seem to be having an impact on the business fixed investment.”
According to a recent study by the New York Fed, expectations for rising home prices have risen to their highest point since July, with most of the gain coming from areas east of the Mississippi River.
While the majority of consumers claimed they did not expect that fuel, medical care, or rent costs would decrease, they did believe that food prices would.