Inflation jumped 0.4% in April as prices remain stubbornly high

Inflation rose again in April despite an aggressive interest-rate hike campaign by the Federal Reserve, indicating that strong underlying price pressures are still bubbling beneath the surface of the economy – and continuing to burden millions of Americans.

The Labor Department said Wednesday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, rose 0.4% in April from the previous month, much faster than the 0.1% increase recorded in March. Prices climbed 4.9% on an annual basis.

Those figures were mostly in line with forecasts by Refinitiv economists. 

Although inflation has cooled from a peak of 9.1%, it remains about more than double the pre-pandemic average and well above the Fed’s 2% target rate.

Other parts of the report also pointed to a slow retreat for inflation, a worrisome sign for the Federal Reserve. Core prices, which exclude the more volatile measurements of food and energy, climbed 0.4%, or 5.5% annually. That is a slight drop from the 5.5% increase in March, but it marked the fifth straight month that core prices climbed 0.4% or more.

“Inflation has moved beyond sticky at this point and after three months of core CPI hanging above 5%, it’s become tenacious,” said Robert Frick, corporate economist with Navy Federal Credit Union. “Given the biggest contributor to high CPI once again was shelter, and home sales prices have hit their own plateau, we may not see significant drops in CPI until this fall.”

This is a developing story. Please check back for updates.