Inflation cools for 10th straight month
Broken down by category, the food indexes for:
- fruits and vegetables decreased by 0.5%.
- meats, poultry, fish and eggs fell 0.3%.
- dairy and related products dipped 0.7%, the largest decline since 2015.
- non-alcohol beverages posted relatively flat with a 0.1% decline.
“One of the largest positives is the slowdown in inflation for food-at-home, including some of the key grocery categories,” said Elizabeth Lafontaine, chief retail analyst for Retail Leader Pro. “However, for consumers overall, the continued increase in inflation for shelter is still worrisome as large expenses for consumers continue to climb.”
The largest month-over-month (MoM) decrease in April was in piped gas service, where the CPI declined by 4.9%. Overall, energy services, which include electricity, declined by 4.5%. The largest MoM increase was in used cars and trucks, where the CPI increased by 4.4%. New vehicle costs, meanwhile, decreased by 0.2%.
Even though cooling inflation represents positive news for consumers, they’re still unlikely to see immediate relief. It’s also unlikely to represent immediate relief for retailers, as consumer perceptions around price and the economy developed during the last year or so are likely to persist even while conditions improve.
The Federal Reserve has responded to continued inflation by hiking interest rates, most recently raising them by 0.25%, though it this month signaled continued hikes could finally cease. Fed Chair Jerome Powell told reporters this month that economic conditions — including the recent failure of three major banks — “may not be far off, or possibly even at” a level where it would end rate hikes.