The pace of inflation eased slightly last month, but still remained high as the Federal Reserve weighs whether to continue hiking interest rates to bring surging prices under control.
The core Consumer Price Index, which excludes food and energy, rose 5.5% in April — easing slightly from a 5.6% increase in March, according to the US Bureau of Labor Statistics.
The overall CPI rose last month by 4.9% — slightly ticking down from 5% in March.
Core inflation — a closely watched measure of what consumers pay for key household goods — rose 0.4%.
The rising prices of shelter, gasoline, and used cars fueled the latest inflation numbers, though it was offset somewhat by declines in gas, new cars, and food.
Shelter rose by another 0.4% from March to April — which is slightly lower than the previous month but was still a key factor in driving up consumer costs.
Overall from a year ago, shelter, which takes into account rent, lodging away from home, and household insurance, is up 8.1%.
The price of used cars and trucks jumped 4.4% — reversing earlier declines.
Food prices remained flat while the energy index rose 0.6% — mainly driven by the 3% rise in the price of gas.
The Federal Reserve hiked interest rates by another quarter percentage point last week, though investors were encouraged by the language of the central bank’s statement which appeared to suggest that it would pause further increases.
Last Wednesday’s 25-basis point rate hike brought the benchmark funds rate from 5% to 5.25%.
In a statement after its latest policy meeting, the Fed removed a sentence from its previous statement that had said “some additional” rate hikes might be needed.
It replaced it with language that said it will now weigh a range of factors in “determining the extent” to which future hikes might be needed.
The central bank hinted that it was done hiking interest rates after raising them to a high not seen in 16 years.
In an overt shift, the central bank no longer says it “anticipates” further rates will be needed, only that it will watch incoming data to determine if more hikes “may be appropriate.”
The Fed governors cut from their previous policy statement in March indicating that more rate hikes might be needed.
The Fed’s rate increases since March 2022 have more than doubled mortgage rates, elevated the costs of auto loans, credit card borrowing and business loans and heightened the risk of a recession
Fed Chair Jerome Powell told reporters last week that the Fed has yet to decide whether to suspend its rate hikes.
But he pointed to the change in the statement’s language as confirming at least that possibility.
“Inflation pressures continue to run high, and the process of getting getting inflation back down to 2% has a long way to go,” Powell said.
Powell said that committee will be taking a “data-dependent approach” moving forward, and noted that inflation “continues to run high.”
He said that the Federal Open Market Committee — the body which determines monetary policy — will be taking a “data-dependent approach” moving forward, and noted that inflation “continues to run high.”
This story originally appeared on NYPost
