Consumer prices were flat in April according to the Bureau of Labor Statistics. Energy costs fell 1.7 percent in April, partially offsetting the run-up in the first three months of the year. Food costs were 0.2 percent higher for the second month in a row, with 3.1 percent inflation for food over the past twelve months.
Core inflation, which excludes food and energy costs, rose 0.2 percent in April. On an annual basis, overall and core prices have both risen by 2.3 percent. Core inflation has stayed around that range for the past few months. While this exceeds the Federal Reserve’s stated goal of not having core inflation exceeding 2 percent, consumer price growth remains modest overall.
Outside of food and energy, a number of categories saw prices increases, helping to lift core inflation. These include new and used motor vehicles and apparel. But, there were also some areas where prices fell for the month, including appliances, household furnishings and computers.
Overall, these numbers confirm what many Americans have perhaps already noticed. U.S. consumer pricing pressures have eased considerably in the past month. A similar finding was observed last Friday with the release of producer price data. Even with core inflation exceeding 2 percent, pricing pressures are not sufficient enough to warrant tighter monetary policy, at least not yet.
Chad Moutray is chief economist, National Association of Manufacturers.