US inflation showed signs of moderating in April. This gives the US central bank, the Federal Reserve, room to suspend planned rate hikes. The consumer price index rose less than expected 4.9% over last year. That’s according to a report from the Bureau of Labor Statistics, released today. Bloomberg reports.
Since the release of the report, US stocks and bonds have risen, while the dollar has also weakened. The report shows that inflation has eased since last year’s credit turmoil and interest rate hikes. However, prices are still rising rapidly and the job market remains robust.
Wednesday’s report is one of several that will shape the course of politicians next month. Similarly, the May CPI, new labor market reports and personal spending ratio (PCE) will also have an effect on the Federal Reserve’s next policy. Furthermore, policy makers are still monitoring the continuation of stress at banks and the extent to which they will further tighten credit conditions.
In April, several key factors showed that US inflation eased. For example, the prices of airline tickets, hotels and new cars have fallen. Housing costs, which form the largest component within services and make up about a third of the total CPI, rose 0.4% last month. This is the smallest increase in more than a year.
Prices for services outside of housing and energy rose 0.1 percent in April and 5.1 percent from a year ago. Energy prices rose 0.6% last month, due to rising fuel prices. And while the cost of food fell for a second month, the price of eating out continued to rise.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
