Inflation slowed in April as consumers paid less for groceries

Inflation continued to be top of mind for consumers in April - UnSplash +

Gasoline and rent continued to produce the most pain

Inflation cooled slightly in April as the Labor Department’s Consumer Price Index (CPI) rose 0.3%, about what economists expected.

That follows an increase in the CPI of 0.4% in March, which was hotter than expected. For the last 12 months, the U.S. inflation rate is 3.4 %.

In April, the cost of food consumed away from home – mostly groceries – declined 0.2%. Food away from home – mostly restaurants – continued to rise.

Food away from home costs rose 0.3% from March had are up 4.1% year-over-year.

Gasoline prices also continued to fuel inflation, rising 2.8%. The cost of shelter, mostly rent, rose 0.4%. The cost of rent is up 5.3% over the last 12 months, one of the biggest inflation drivers.

The April CPI might not be a huge factor in determining when the Federal Reserve might lower interest rates. 

“We see inflation volatility remaining,” Karim Chedid, an investment strategist at BlackRock, told the Wall Street Journal. “Our base case is that higher for longer is still a theme for rates.” 

On Tuesday, the Labor Department reported the final demand Producer Price Index, a measure of costs at the producer level, rose 0.5% from March.

Nearly three-quarters of the April advance in final demand prices is attributable to a 0.6% increase in cost of services. Prices for final demand goods moved up 0.4%.

Need cash now? Use our Personal Loans Tool to lock in great offers in minutes!