US consumer inflation slows down, price pressures remain
While inflation in the US show that the Consumer Price Index (CPI) climbed by 4.9% on a year-on-year basis, May's CPI shows slightly lower percentages than April's.
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A cart holding groceries is pushed through a supermarket in Bellflower, California, on Monday, Feb. 13, 2023. (AP)
The Labor Department reported on Wednesday that consumer inflation in the United States fell only marginally in April, despite robust measures to cool the economy and limit price increases.
A crucial indicator of inflation, the consumer price index (CPI), climbed by 4.9% since last year. However, May's CPI marks a slightly lower number than March which was marked by 5.0% increase vis-à-vis last year.
Although the most recent data marked a positive step upwards and represented the least yearly increase in around two years, it remained much higher than pre-pandemic levels.
"The index for shelter was the largest contributor to the monthly all items increase, followed by increases in the index for used cars and trucks and the index for gasoline," said the Labor Department in a statement.
It is worth mentioning that the total CPI increased by 0.4 percent on a monthly basis in April while noting that volatile food and energy prices are excluded.
Consumer inflation increased by 0.4 percent on a monthly basis in April, matching March's increase, when volatile food and energy prices are excluded.
As the Federal Reserve considered whether or not to raise interest rates further and how long to maintain its tight monetary policy, analysts have keenly watched inflation measurements as a critical data point.
US consumer confidence falls to 9-month low in April
Earlier in April, the US consumer confidence decreased more than many had been anticipated, according to survey results, as per the report released at the end of April, driven by a decline in expectations among households with annual incomes over $50,000 and those over 55.
The negative findings may decrease some of the pressure on the Federal Reserve as it gets ready to think about raising interest rates for the tenth consecutive week next week in an effort to rein in inflation.
The Conference Board reported that the consumer confidence index decreased in April to 101.3 from a revised 104.0 in March. This fell short of economists' median predictions in a MarketWatch poll.
The expectations of consumers "fell and remain below the level which often signals a recession looming in the short term," according to a statement from Ataman Ozyildirim, senior director of economics at The Conference Board.
He said that "compared to last month, fewer households expect business conditions to improve and more expect worsening of conditions in the next six months," adding that they expect fewer jobs to be available over the short term.
A few members of the Fed's rate-setting committee have suggested earlier in the month that the US central bank should lift its benchmark lending rate next week.
