The cost of goods and services for U.S. consumers cooled for the 10th consecutive month amid higher interest rates imposed by the Fed to curb inflation. Still, consumer price increases remain at decade highs, as a strong labor market and resilient consumer spending have continued to put upward pressure on prices. The Consumer Price Index (CPI) for All Urban Consumers, a measure of price changes commonly referred to as the inflation rate, was at its the lowest level in two years at 4.9% in the year-ending April 2023, according to the Bureau of Labor Statistics. That was slightly below economists’ expectations of 5% and slightly below March’s 5% annual gain. In addition, inflation has cooled considerably since reaching a peak of 9.1% last June, which was the biggest year-over-year jump in prices since November 1981. Still, inflation has been well above the Fed’s target rate of 2% annually – the pre-pandemic norm. Excluding volatile food and energy prices, the core CPI increased 5.5% during the year-ending April. Looking at other indexes, the cost of food increased 7.7% over the past year. Shelter, which accounts for about one-third of the total CPI index, saw an 8.1% year-over-year price surge in April, one of the biggest annual gains in over the past 40 years. And new vehicles posted a 5.4% price increase over the past year. Contributing to the lower inflation rate, the cost of energy dropped 5.1% year-over-year in April, with the cost of gasoline (-12.2%) having a big impact on that decline. The price of used cars and trucks (-6.6%) was also down on an annual basis.
