Inflation

 

Inflation fell in April compared to the previous month, showing signs of potential weakness

Inflation fell slightly in April after several months of steady growth, but is still close to the highest level in the past four decades, severely affecting U.S. households.

Consumer prices jumped 8.3% last month compared to last year, the government said on Wednesday. That was lower than the 8.5% annual increase in March, which was the highest since 1981. For the month, prices rose 0.3% in March-April, the highest increase in eight months.

However, Wednesday's report contained warning signs that inflation could become more entrenched. Excluding volatile food and energy categories, so-called core prices jumped from March to April twice as much as in the previous month. This growth is due to the sharp rise in prices for air tickets, hotel rooms and new cars. The cost of renting apartments also continued to grow.

These price increases " clearly show that there is still a long way to go before inflation returns to more acceptable levels," said Eric Vinograd, U.S. economist at AB asset manager.

Economists say that even if inflation slows, it is likely to remain high in 2023, leaving many Americans burdened by price increases that have outpaced wage increases. Low-income families, blacks and Latinos, who on average spend most of their income on gasoline, food and rent, are particularly affected.

The report, released on Wednesday, also highlights the challenges facing the Fed and the White House in their battle to contain inflation.

In April, falling gas prices contributed to a slowdown in overall inflation. According to the American Bar Association, the average price of a gallon of gasoline in the country fell to 4 4.10 in April after rising to.4.32 in March. But since then, gas prices have reached a record 4 4.40-ha per gallon.

Food prices also continue to rise, in part because the Russian invasion of Ukraine led to higher prices for wheat and other grains. Food prices rose by 1% from March to April and by almost 11% compared to last year. This annual growth is the largest since 1980.