Live Updates: Interest Rate Hike Cools Inflation: April’s Rate Falls to 4.9%, Surprising Analysts

Live Updates: The April report from the Labor Department reveals that the consumer price index rose by 0.4%, meeting the Dow Jones estimate. While the annual inflation rate was 4.9%, it offers hope that the cost of living may decrease later in the year.

May 10, 2023 - 11:43
May 10, 2023 - 11:44
Live Updates: Interest Rate Hike Cools Inflation: April’s Rate Falls to 4.9%, Surprising Analysts
Interest Rate Hike Cools Inflation | Image Source: Hindustan Times

According to a report from the Labor Department on Wednesday, the consumer price index, a benchmark measure of inflation, rose by 0.4% in April, with the increase mainly driven by higher shelter, used vehicle, and gasoline prices. However, the annual inflation rate of 4.9% was slightly lower than estimated, raising hopes that the trend may ease later in the year. This news provides insights into the current state of the economy and its potential future trajectory.

The annual inflation rate came in at 4.9%, which is slightly lower than the expected 5%, giving some hope for a lower cost of living later in the year. In contrast, the core consumer price index, which excludes food and energy categories, increased by 0.4% monthly and 5.5% from a year ago, meeting expectations. These figures mark the lowest annual pace since April 2021.

Source: U.S. Bureau of Labor Statistics

The consumer price index rose in April primarily due to increases in shelter, gasoline, and used vehicles. However, prices for fuel oil, new vehicles, and food at home declined, which offset the overall increase. The positive market reaction was evident as Treasury yields dropped, causing futures to turn positive. 

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Key Moments

  • Consumer price index increased by 0.4% in the past month due to higher shelter, used vehicle, and gas prices
  • Inflation rate for the past year was 4.9%, slightly lower than expected, providing hope for a downward trend
  • Real average hourly earnings adjusted for inflation increased by 0.1% for the month but decreased by 0.5% from last year

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  • 10 May 2023 12:20 PM
    Will the prices of groceries decline in the near future?

    According to recent data, grocery prices have slightly decreased by 0.2%, marking the second consecutive month of decline. The yearly increase also eased from 8.4% to 7.1%, which can be attributed to the decrease in global demand for commodities like wheat and corn.

    The price of eggs in April experienced a decline of 1.5%, which is the third straight monthly decrease, after previously experiencing sharp increases due to bird flu. Despite the recent decline, the cost of eggs is still up by 21.4% over the past year. Other items that experienced a decline in price include pork, which fell by 1.2%, fish and seafood, which decreased by 0.7%, and bread, which went down by 0.3%.

    However, some items saw an increase in cost. Chicken prices went up by 0.5%, and uncooked ground beef increased by 0.6%. Meanwhile, restaurant prices increased by 0.4% and have gone up by 8.6% annually.

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