US prices stay high, showing inflation pressures persist
Prices increased 0.4% from March to April, the government said Wednesday, up sharply from a 0.1% rise from February to March. Compared with a year earlier, prices climbed 4.9%, down slightly from March's year-over-year increase. It was the smallest annual increase in two years.
Even with price pressures rising in April, the latest data did provide some evidence of cooling inflation. Grocery prices fell for a second straight month. And the cost of many services, including airline fares and hotel rooms, plunged. Though apartment rents rose in April, they did so more slowly than in previous months.
Measured year over year, last month's decline in inflation was much less than in previous months, underscoring that consumer price increases might not fall back to the Fed's 2% target until at least well into next year.
Excluding volatile energy and food costs, so-called core prices rose 0.4% from March to April, the same as from February to March. It was the fifth straight month that they have risen at least 0.4%. Core prices are regarded as a reliable gauge of longer-term inflation trends. Compared with a year ago, core inflation rose 5.5%, just below a year-over-year increase of 5.6% in March.
"This is a story of still-sticky core inflation at an elevated level," said
For everyday consumer items, Wednesday's inflation report was mixed. Gasoline prices jumped 3% just in April. By contrast, grocery prices dropped for a second straight month.
Used car prices surged 4.4% after nine months of declines.
Airline fares, though, dropped 2.6% in April, and hotel prices plunged 3% after four straight monthly increases.
This measure, which excludes energy services and housing, rose just 0.1% from March to April, the smallest increase since last July.
Consumers and businesses continue to struggle with higher costs, and there are signs that some are responding by reining in their spending.
Minerva has tried to find ways to save on costs. He has stopped serving lunch during the week and is closed on Mondays and Tuesdays. Even with the reduction in hours, though, his labor costs are about 10% higher than before the pandemic.
With consumers starting to resist higher prices, Minerva said, he's been forced to drop expensive menus for such holidays as
"People are not spending as much money," he said. For
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