MAY 20, 2024 – INFLATION EASES SLIGHTLY IN APRIL
Inflation cooled in April after three months of higher-than-expected readings. Consumer prices showed a one month rise of 0.3 percent, and a year-over-year increase of 3.4 percent, down 0.1 percent from March. The core inflation number is at its lowest level in 3 years at 3.6 percent, down from 3.8 percent in March. It is hoped this report is the end of the worsening trend, though the inflation rate is still well above the Fed’s 2 percent target.
Retail sales data, also released lats week, showed spending was unchanged in April, following a healthy 0.6 percent gain in March. Moderation in consumer spending may convince the Fed inflation will not rebound, though one month’s data does not imply a trend.
A slowdown in April’s job market, along with a rise in unemployment took the edge off. Now, the latest inflation data is keeping hopes alive that rates will be adjusted in September. Some economists suggest that the Fed could cut rates twice in 2024 if inflation cools further.