NY.- Inflation slowed for a 10th straight month in April, a report showed Wednesday, good news for American families struggling under the burden of higher costs and for lawmakers in Washington trying to deal with rapidly rising prices.
The consumer price index rose 4.9 percent in April from a year earlier, less than 5 percent economists had expected in a Bloomberg survey. Inflation has come down noticeably from a peak of above 9 percent last summer, though it has remained well above the 2 percent annual increase that was normal before the pandemic.
After stripping out food and fuel to get a sense of the underlying trend in price increases, what economists call a core measure, consumer prices rose 5.5 percent from a year earlier, a slight drop from last year. 5.6 percent in the previous reading.
The slowdown in price increases last month came even as gasoline costs rose and rental costs continued to rise fairly rapidly. New car prices, a measure of the price of healthcare, and airfares fell in April, the report showed, helping to reduce inflation.
Stock prices rose in response to the data as investors greeted it as good news for the Federal Reserve. Economists and data analysts agreed that the report offers further evidence that inflation is moderating significantly, but said the road back to normal prices remains a long one.
For example, a closely watched measure of utility prices outside of housing costs pulled back significantly, but in a way that may not be sustainable. The measure rose 5.2 percent annually, well down from 5.7 percent in the previous reading, according to a Bloomberg calculation.
That was an encouraging sign that a stubborn component of inflation is finally about to crack, but it was also driven in part by a slowdown in travel spending that may not last, said Laura Rosner-Warburton, a senior economist at MacroPolicy Perspectives. .
That slowdown offered “a bit of good news, but also probably a bit of a lie,” he said.
While inflation has been gradually cooling for months, it has remained too high for policymakers to feel comfortable with.
Much of the slowdown in price increases came as supply chain bottlenecks cleared, product shortages eased, and gasoline prices moderated after a spike in the summer of 2022. linked to Russia’s invasion of Ukraine.
But the underlying trends that could keep inflation stubbornly high over time have remained intact, including unusually strong wage growth, which could prompt companies to try to charge more for goods and services.
