Inflationary pressures eased in April as consumer prices rose at the slowest pace in three months

Consumer price increases in the United States slowed during April, according to a report from the European Central Bank Latest data Released by the Bureau of Labor Statistics Wednesday morning.

The Consumer Price Index (CPI) rose 0.3% month-over-month and 3.4% year-over-year in April, a slight slowdown from the 3.5% year-over-year price increase in March and a 0.4% month-over-month increase.

The monthly increase for April was lower than economists’ expectations of a 0.4% rise. The annual rise in prices matched estimates, according to Bloomberg data.

On a “core” basis, which excludes the more volatile costs of food and gas, prices in April rose 0.3% from the previous month and 3.6% from a year ago – lower than March data. Both measures met economists’ expectations.

Investors now expect two cuts of 25 basis points this year, down from the six cuts expected at the start of the year, according to updated Bloomberg data.

Markets rose after the data was released, with the 10-year Treasury yield (^TNX) falling about 6 basis points to trade at approximately 4.38%.

“The lack of a bad surprise this time is welcome,” Mark Hamrick, chief economic analyst at Bankrate, wrote in response to the publication. However, Hamrick added: “With the headline increase of 3.4% year-on-year and 3.6% in the core economy (excluding food and energy), these rates remain disturbingly high. The battle mode against inflation requires that interest rates remain high in economies.” “Advanced”. In the near term.”

After the data was released, markets were pricing in a roughly 53% chance that the Federal Reserve would start cutting interest rates at its September meeting. According to CME FedWatch data. This is up from the roughly 45% probability in the previous month.

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Notable callbacks from the inflation reading include the Shelter Index, which rose 5.5% on an unadjusted annual basis, a deceleration since March. The index rose 0.4% month over month and was the biggest factor in the monthly increase in core prices, according to the Bureau of Labor Statistics.

According to economists, housing inflation is largely responsible for the rise in core inflation readings.

The rental and rent-equivalent index for owners rose 0.4% month-on-month, consistent with March’s rise. The owner-equivalent rent is the hypothetical rent a homeowner would pay for the same property.

Lodging away from home fell 0.2% in April after rising 0.1% in March.

FILE - Federal Reserve Chairman Jerome Powell speaks during a news conference at the Federal Reserve in Washington, May 1, 2024. The sharp increases in interest rates over the past two years will likely take longer than previously expected to bring down inflation, several Fed officials said as he said in recent comments, suggesting there may be few, if any, interest rate cuts this year.  (AP Photo/Susan Walsh, File)

Federal Reserve Chairman Jerome Powell speaks during a news conference at the Federal Reserve in Washington, May 1, 2024. (AP Photo/Susan Walsh, File) (News agency)

Energy prices continued to rise in April, supported by higher gas prices. The index jumped another 1.1% last month, matching March’s increase. On an annual basis, the index rose by 2.6%.

Gas prices rose 2.8% from March to April after rising 1.7% the previous month.

The food index rose by 2.2% in April compared to last year, with food prices stable from March to April. The dining at home index fell by 0.2% during the month while the dining away from home index rose another 0.3%.

Other indicators that increased in April included shelter, vehicle insurance, medical care, clothing and personal care. Auto insurance, which was prominent in the March report after the category jumped 2.6%, rose another 1.8% in April.

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Indices for used cars and trucks, furnishings, home operations and new vehicles were among those that declined during the month, according to the Bureau of Labor Statistics.

Alexandra Canal He is a senior reporter at Yahoo Finance. Follow her on X @allie_canal, linkedin, And email it to alexandra.canal@yahoofinance.com.

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