U.S. Inflation Remains Near 40-Year Highs as April CPI Tops Expectations

The annual rate of inflation in the United States slowed for the first time in eight months in April, but inflation gauges remained stubbornly high and outstripped forecasts, according to government data released Wednesday, May 11.

Easing energy prices helped to reduce overall inflation from the month prior, but consumer prices are still rising rapidly and are sharply higher than a year ago.

"The peak of inflation may be behind us, but today’s CPI report points to a long, slow descent or maybe even a plateau around 8%," Bloomberg News quoted Robert Frick, corporate economist at Navy Federal Credit Union.

In the headline monthly figure, U.S. consumer prices rose 0.3% in April following a 1.2% increase in March — the largest monthly gain since September 2005, the Labor Department said in its monthly report on the Consumer Price Index (CPI). The CPI is a broad measure of what Americans pay for everyday items ranging from eggs to electricity. The figure compares to reported estimates for a 0.2% increase.

"Increases in the indexes for shelter, food, airline fares, and new vehicles were the largest contributors to the seasonally adjusted all items increase," the Labor Department’s monthly report said.

Overall food prices increased 0.9% in April, following two straight 1% monthly gains, with grocery prices rising 1% and the cost of dining out advancing 0.6%. Food prices surged 9.4% year-on-year, for the biggest yearly increase since April 1981, with costs up 10.8% for groceries and 7.2% for food away from home. Prices for virtually all major grocery items have soared over the past year.

Prices at the pump fell 6.1% in April, the first monthly decline since January, after soaring 18.3% in March and rising 6.6% in February. Gas prices rose 43.6% from a year earlier.

"The slowdown in CPI was largely due to March’s decline in gasoline prices after April’s surge. Used car prices fell too," MarketWatch quoted chief economist Bill Adams of Comerica Bank. "But sticky services prices continued to rise rapidly in April, evidence that inflation’s momentum is still strong."

The broader index for energy, which combines items like gasoline, electricity, and fuel oil, fell 2.7% last month after jumping 11% previously. Energy prices rose 30.3% from a year ago.

Excluding the more volatile food and energy components, core consumer prices rose 0.6% in April after rising 0.3% in March, and also against an expected increase of around 0.4% from economists. Still, the recently monthly paces are contrasting to June when the core index at 0.9% was the highest for a month since April 1982.

Shelter or housing costs rose 0.5% for a third straight month, and they advanced 5.1% from a year earlier for their biggest 12-month increase since May 1991. Components of shelter include pricing items like rent for apartments, rental equivalence, lodging away from home such as hotels and motels, and housing at schools. The index accounts for about one-third of the entire CPI.

Airline fares soared 18.6% last month — the biggest 1-month gain since the inception of the series in 1963, after rising 10.7% in March.

"The index for airline fares rose 33.3 percent over the last year, the largest 12-month increase since the period ending December 1980," the report noted.

Clothing prices declined 0.8% last month after increasing 0.6%, and they advanced 5.4% from a year earlier.

New vehicle prices picked up 1.1%, for their twelfth increase in thirteen months, after edging higher 0.2% previously. Prices increased 13.2% from a year ago.

Used car and truck prices fell for a third month in a row, down 0.4%, but still logged 22.7% higher than a year ago.

In the headline annual figure, inflation rose 8.3% over the past 12 months, slowing a tad from the prior 8.5% increase which registered as the highest annual inflation rate since December 1981. The level has now topped 6% for seven straight months and has been at or above 7% for five month in a row. Expectations had been for an 8.1% gain.

Core inflation rose 6.2% over the past year, also slowing from the previous 6.5% gain which was largest increase since the annual period ending August 1982. The core, "all items less food and energy" index is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set its key interest rate.

The following table of key inflation figures is for the last seven months through March, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on May 11, 2022. To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.

October 2021 to April 2022 Consumer Prices – Gains & Losses in Percent
(Seasonally Adjusted)

  Oct. 2021 Nov. 2021 Dec. 2021 Jan. 2022 Feb. 2022 March 2022 April 2022 12 Month
All items 0.9 0.7 0.6 0.6 0.8 1.2 0.3 8.3
  Food 0.9 0.8 0.5 0.9 1.0 1.0 0.9 9.4
    Food at home 0.9 0.9 0.4 1.0 1.4 1.5 1.0 10.8
    Food away from home 0.8 0.6 0.6 0.7 0.4 0.3 0.6 7.2
  Energy 3.7 2.4 0.9 0.9 3.5 11.0 -2.7 30.3
    Energy commodities 4.7 4.2 1.3 -0.6 6.7 18.1 -5.4 44.7
      Gasoline (all types) 4.6 4.5 1.3 -0.8 6.6 18.3 -6.1 43.6
      Fuel oil 12.3 3.5 -2.4 9.5 7.7 22.3 2.7 80.5
    Energy services 2.4 0.2 0.3 2.9 -0.4 1.8 1.3 13.7
      Electricity 1.4 0.2 0.5 4.2 -1.1 2.2 0.7 11.0
      Utility (piped) gas service 5.9 0.3 -0.3 -0.5 1.5 0.6 3.1 22.7
  All items less food, energy 0.6 0.5 0.6 0.6 0.5 0.3 0.6 6.2
    Commodities less food, energy 1.1 0.9 1.2 1.0 0.4 -0.4 0.2 9.7
      New vehicles 1.3 1.2 1.2 .0 0.3 0.2 1.1 13.2
      Used cars and trucks 2.5 2.4 3.3 1.5 -0.2 -3.8 -0.4 22.7
      Apparel 0.6 0.7 1.1 1.1 0.7 0.6 -0.8 5.4
      Medical care 0.6 0.1 .0 0.9 0.3 0.2 0.1 2.1
    Services less energy 0.4 0.4 0.3 0.4 0.5 0.6 0.7 4.9
      Shelter 0.5 0.5 0.4 0.3 0.5 0.5 0.5 5.1
      Transportation 0.2 0.7 .0 1.0 1.4 2.0 3.1 8.5
      Medical care 0.4 0.3 0.3 0.6 0.1 0.6 0.5 3.5

 

The BLS releases inflation data around the middle of a month for consumer prices surveyed up to the previous month. The Consumer Price Index (CPI) for May and the latest annual period become public on June 10, 2022.

CPI data is used in calculating inflation rates and in this site’s U.S. Inflation Calculator. The US Inflation Calculator shows cumulative inflation and the change in buying power of the U.S. dollar over time.

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