Consumers saw some relief in April but not as much as expected, according to the latest data from the Labor Department…(BLS)
- Y-O-Y: The Consumer Price Index for All Urban Consumers fell to 8.3 % in April, down from 8.5% the previous month.
- M-O-M: The all items index saw an increase of 0.3%in April, this is down from the 1.2% increase in March.
NOTE: Core CPI fell slightly to 6.2% from 6.5% in March.
Food prices, unfortunately, showed no signs of slowing in April with prices up 9.4% year-over-year thanks to a 1.0% monthly increase. This is higher than the 8.8% reported in March…
- Meat, poultry, fish, & eggs held on to the top spot with 14.3% year-over-year inflation thanks to a 1.7% month-over-month jump followed by cereals & bakery products (+10.3%) and dairy (+9.1%).
- Food at home continues to increase faster with a year-over-year rate of 10.8% compared to food away from home which was reported at an annual increase of 7.2%.
Energy prices were relatively muted in April with some categories even seeing a slight pullback…
- Gas prices actually saw a 1.0% drop month-over-month but that will be of little relief to consumers as prices are still up 43% year-over-year.
- Electricity prices continued their climb with a 0.9% increase from March, putting prices up 11.0% year-over-year.
Used cars & trucks actually fell for the second month in a row with a 0.6% drop from March which means they are ONLY up 22.7% year-over-year
- New vehicles were up 1.0% for the month and 13.2% year-over-year.
Shelter costs saw slightly slower growth at 0.5%, but that is little help to consumers as costs continue to steadily rise…
- Rents and ownership were both up 4.8% year-over-year, but rents did see a bigger monthly jump of 0.5% vs ownership at 0.4%
- REMINDER: Shelter costs make up nearly 1/3 of CPI
Seeing a reduced inflation rate was a welcome sight, but inflation not falling as much as expected was not. With shelter costs locked in close to 5%, it is going to be hard to see a major reduction anytime soon, even if the Fed causes a recession. Bill Dudley wrote in Bloomberg that the Fed might need to go significantly beyond neutral to get inflation under control. And the Fed’s unwillingness to admit this, “could undermine its credibility, and hence its ability to do its job.”