CPI rises in April, airfare sees largest one-month surge to date
On a seasonally-adjusted basis, overall consumer prices rose 0.3 percent in April, with the Bureau of Labor Statistics reporting the overall consumer price index (CPI) grew by 8.2 percent over the 12-month period. NAFCU Chief Economist and Vice President of Research Curt Long analyzes the data in a new Macro Data Flash report.
Citing that inflation slowed year-over-year price growth to 8.2 percent, Long noted “the deceleration was largely due to energy prices, which fell 2.7 during the month. However, diesel is in short supply and likely to contributed to the 18.6 percent surge in airline fares in April.”
"The airfare spike was the largest one-month increase in the series, which started in 1963," added Long.
Energy prices fell by 2.7 percent during the month. From a year ago, energy prices were up 30.2 percent. Additionally, food prices climbed 0.9 percent in April and are up 8.4 percent compared to this time last year.
"While headline inflation slowed, core inflation – which excludes food and energy – accelerated 0.6 percent in April,” Long added. "Housing costs make up one-third of the hypothetical consumption basket and advanced by 0.5 percent for the third month in a row, establishing a high floor for overall inflation.”
Year-over-year core CPI growth was 6.1 percent.
"The FOMC has already committed to tighten policy aggressively this summer, and this report will do nothing to dissuade them from that plan," concluded Long. "With the economy clearly slowing, if inflation fails to respond quickly to higher rates, it will place an even greater pressure on the Fed and increase the odds of a recession."
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