Riverside

Consumer price index: April report shows inflation slowed a bit – Riverside, California

Riverside, California 2022-05-11 08:58:03 –

The slight decline in annual inflation is the first slowdown after the worsening inflation for the seventh straight month.

Washington — Inflation slowed in April 7 months of relentless profitTentative signs that price increases may have peaked, despite imposing a financial burden on US homes.

Consumer prices rose 8.3% last month from 12 months ago. Ministry of Labor said on Wednesday..

This was below the March year-on-year surge of 8.5%, the highest rate since 1981. On a monthly basis, prices rose 0.3% from March to April, still at a rate of increase, but only slightly. In 8 months.

Still, Wednesday’s report contained some warning signs that inflation could be more established. Excluding the unstable food and energy categories, so-called core prices rose 0.6% from March to April, doubling the 0.3% rise from February to March. These increases were driven by soaring prices for airline tickets, hotel rooms and new cars. Rents have also skyrocketed.

Over the past year, food prices have risen 10.8%, the largest year-over-year increase since 1980. The cost of a gallon of gas fell 6.1% in April, but has risen nearly 44% from a year ago.

And so far in May, the price of gasoline pumps has skyrocketed. Nationally, the average gallon of gas is a record $ 4.40. According to AAAHowever, that number is not inflation-adjusted. The high price of oil is the main factor. One barrel of US benchmark crude was sold on Tuesday for about $ 100 a barrel. Gas fell to about $ 4.10 per gallon in April after reaching $ 4.32 in March.

Beyond the financial burden of households, inflation has caused serious political problems for President Joe Biden and Democrats in parliament during the midterm election season, and Republicans launched Biden’s $ 1.9 trillion financial support package last March. Claims Overheated the economy By flooding it with incentives, enhanced unemployment assistance, and payment of child tax credits.

On Tuesday, Biden sought to take the lead, proclaiming inflation as “the biggest problem facing families today” and “my national top priority.”

Biden blamed inflation for the rapid economic recovery from the pandemic and the chronic supply chain roar associated with Russia’s invasion of Ukraine. He said his administration will help mitigate price increases by reducing the government’s budget deficit and promoting competition in industries such as Meatpacking, which is dominated by a few industry giants. Stated.

Still, new turmoil and other unforeseen problems abroad can always bring US inflation back to new highs. For example, if the European Union decides to block Russia’s oil, US gas prices could accelerate. China’s blockade of COVID has exacerbated supply problems and hindered the growth of the world’s second-largest economy.

Earlier signs that US inflation could peak did not last long. As many economists (and Federal Reserve officials) have suggested, price increases slowed in August and September last year, when inflation could be temporary. It suggests that there is. However, prices soared again in October, and Fed Chair Jerome Powell began to shift policy to higher interest rates.

However, this time around, several factors indicate peak inflation. Natural gas prices, which soared in March after Russia’s invasion of Ukraine, fell on average in April. The supply chain of automakers has been elucidated a little and new car sales are increasing.

Food and energy have endured the worst price increases in the past year, but analysts often monitor core numbers to get a sense of the underlying inflation. Core inflation also usually rises more slowly than the overall price rise and may take longer to fall. For example, rents have historically risen at a rapid pace, and there are few signs that this trend will soon reverse.

With the unexpected persistence of high inflation, the Fed has embarked on what it could do. A series of fastest rising interest rates In 33 years.Last week, the Fed hit benchmark short-term interest rates Half point, The most exponential increase in 20 years. And Powell signaled that more such sharp rate hikes would come.

The Powell Fed is trying to perform the infamous difficult and risky task of cooling the economy enough to slow inflation without causing a recession. Economists say such results are possible, but unlikely for such high inflation.

in the meantime, By some means American wages are rising at the fastest pace in 20 years. Their higher wages allow more people to catch up with higher prices, at least in part. However, employers usually respond by charging customers further to cover higher labor costs, which increases inflationary pressure.

The job report last Friday in April contained data on hourly wages. Suggested that wage increases are slowingIf that continues, it could help mitigate inflation this year.

Consumer price index: April report shows inflation slowed a bit Source link Consumer price index: April report shows inflation slowed a bit

Back to top button