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Inflation stabilized in April, but tariff effects have yet to be reflected
Key Takeaways
- April's inflation figures showed a 0.1% monthly and 2.1% annual increase, aligning with forecasts. Core inflation was 0.1% monthly and 2.5% annually.
- Food prices decreased by 0.3%, while energy and shelter costs rose by 0.5% and 0.4%, respectively.
Key inflation gauge increased 0.1% for the month, putting the annual rate at 2.1%
Inflation stabilizes in April: ©Tiko - stock.adobe.com
April’s inflation numbers were fairly flat, but the effect of tariffs have yet to be reflected in the numbers, according to the Commerce Department.
The Federal Reserve’s key inflation measure, the personal consumption expenditures price index, increased 0.1% for the month with annual inflation at 2.1%. These numbers were similar to economist forecasts, with the monthly number being the same as forecast and the annual number being 0.1% lower.
When volatile food and energy prices are excluded – the numbers are 0.1% and 2.5% compared to forecasts of 0.1% and 2.6%. The Federal Reserve sees the core numbers – minus food and energy prices – as a better indicator of economic trends. Food prices decreased 0.3% for the month while energy increased 0.5% and shelter increased 0.4%.
The report also showed that consumer spending slowed sharply, with a 0.2% increase, down from 0.7% in March – but this was in line with estimates. In addition, the personal savings rate increased to 4.9%, up from 4.3% in March. Personal income increased 0.8%, above the 0.3% forecast.
