U.S. CPI Strength Diminishes in April; Core Pricing Pressures Ease

The Consumer Price Index increased 0.3% during April following two consecutive 0.4% increases. A 0.4% rise had been expected in the Action Economics Forecast Survey. The 3.4% y/y rise compared to 3.5% in March, and was increased from a 3.1% January low. It remained below the peak 9.1% y/y increase in June of 2022. The three-month increase of 4.6% (AR) was steady with March and more than double the rise at the end of last year. As expected, prices excluding food & energy also rose 0.3% following three consecutive 0.4% monthly increases. It rose 3.6% y/y last month compared to 3.8% in March; however, during the last three months, core price inflation has accelerated to 4.1% (AR), off the 4.5% March high but higher than the 2.6% low during August of last year.

The CPI less food, energy and shelter, another measure of core pricing power, rose 0.2% after two consecutive 0.3% increases. The 2.1% y/y rise remained below the 7.6% y/y peak in February 2022.

Service costs less energy increased 0.4% in April (5.3% y/y) following two straight 0.5% increases. Transportation services costs strengthened 0.9% (11.2% y/y) following a 1.5% March jump. The cost of shelter rose 0.4% (5.5% y/y) for the fifth month in the last six as owners’ equivalent rent of primary residences increased 0.4% (5.7% y/y) for the third consecutive month. Rents of primary residences increased 0.4% (5.4% y/y) after a 0.4% gain. The cost of lodging away from home fell 0.2% (-0.3% y/y) after two months of 0.1% increase. Education & communication prices rose 0.2% (1.6% y/y) for a second straight month. Recreation services prices rose 0.3% (4.1% y/y) following a 0.1% uptick and medical care service costs rose 0.4% (2.7% y/y) after a 0.6% strengthening.

During April, the CPI for goods less food & energy dipped 0.1% (-1.3% y/y) after falling 0.2% in March. Education & communication goods costs rose 0.1% (-6.0% y/y) following a 1.2% drop in March. Prices for recreation products held steady (-2.2% y/y) after falling 0.5%. Home furnishings prices weakened 0.4% (-2.8% y/y) after a 0.1% slip, while appliance costs fell 0.9% (-5.6% y/y) after two straight months of decline. Apparel prices rose 1.2% (1.3% y/y) after rising 0.7% in March. New vehicle prices eased 0.4% both m/m and y/y after slipping 0.2% in March while used car & truck prices declined 1.4% (-6.9% y/y) after falling 1.1% in March.

Energy prices increased 1.1% (2.6% y/y) in April for a second consecutive month. These gains followed four months of decline. Gasoline prices rose 2.8% (1.2% y/y) after a 1.7% rise. Amongst other energy products, fuel oil prices rose 0.9% (-0.8% y/y) after declining 1.3% in March. Electricity prices slipped 0.1% (+5.1% y/y) after rising 0.9%, while natural gas prices declined 2.9% (-1.9% y/y) after holding steady in March.

Food prices held steady (+2.2% y/y) last month after rising 0.1% in March. Egg prices weakened 7.3% (-9.0% y/y) after five straight months of strong increase. Meat, poultry & fish prices eased 0.1% (+1.9% y/y) after rising 0.6% while cereal & bakery product prices rose 0.6% both m/m and y/y after declining 0.9% in March. Fruit & vegetable prices weakened 0.8% (+1.7% y/y) after edging 0.1% higher, while dairy prices edged up 0.1% (-1.3% y/y) and reversed the March fall. Nonalcoholic beverage prices fell 0.2% (+2.3% y/y) after a 0.3% gain.

The Consumer Price figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.