April CPI Consumer prices rose 0.3 percent slower analysts expected

Consumer prices rose less than expected in April, giving shoppers relief. President Biden vows to fight inflation and lower costs.

On May 15th, the Labor Department released data showing that consumer prices in April rose less than expected. The consumer price index increased by 0.3% compared to the previous month, keeping the year-over-year increase at 3.4%.

This lower-than-expected increase in the CPI provided some relief for shoppers, as it was the smallest increase since January. The core CPI index, which excludes volatile food and energy prices, also rose by 0.3% in April and 3.6% from the previous year.

Gasoline prices saw a sharp increase of 2.8% in April, surpassing the average year-over-year increase of 1.2%. Prices for transportation services also rose by 0.9%. However, prices for used cars and trucks continued to decline, falling by 1.4% in April and 6.9% from the previous year. Consumer prices for new vehicles also decreased by 0.4%.

The Labor Department also reported that wholesale prices in April reached a 2024 high, with a 0.5% increase from the previous month and a 2.2% increase from the previous year.

Tom Lee of Fundstrat Global Advisor noted that the lower-than-expected CPI increase indicates that inflation is normalizing, which is a positive sign for the economy. President Joe Biden emphasized that fighting inflation and lowering costs are his top economic priorities, with plans to lower housing costs, prescription drug prices, and grocery prices for consumers.

Overall, the data suggests that the economy is in good shape, and the Federal Reserve may need to consider cutting rates in response to the current economic conditions.