CNN
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After a hot start to 2024, inflation cooled back down in April, providing a bit of hope for Americans worn down by elevated prices.
Consumer prices were up 3.4% for the 12 months ended in April, easing from 3.5% the month before, according to the latest Consumer Price Index report released Wednesday by the Bureau of Labor Statistics.
On a monthly basis, prices rose 0.3%, a slower pace of growth than the 0.4% seen in the two months prior.
Economists were expecting a 0.4% monthly increase and an annual gain of 3.4%, according to FactSet consensus estimates.
Rising gasoline and shelter costs accounted for more than 70% of the monthly increase in overall inflation, according to the report.
While elevated housing costs and high prices at the pump continue to weigh on Americans, Wednesday’s report did provide some welcome news on another staple spending area: Grocery prices fell for the first time in a year, dropping 0.2% from March.
A closely watched underlying measurement of inflation showed even more progress. Core CPI, which strips out the more volatile categories of energy and food, slowed from 3.8% to 3.6%, its lowest rate since April 2021.
From the month before, core CPI ticked up by 0.3%, its slowest pace since the end of last year.
Wednesday’s report landed mostly in line with economists’ expectations, which is a welcome turnabout from January, February and March, when CPI (and other inflation gauges) came in hot, hot, and hot.
“The last month or two had looked like maybe the improvement was stalling, and this [report] looks like it’s continuing at a slow pace,” Erica Groshen, a former BLS commissioner who serves as senior economics adviser at the Cornell University School of Industrial and Labor Relations, told CNN.
The Federal Reserve has been wanting to see meaningful process on inflation before it starts trimming back interest rates. Those rates are at a 23-year high following an aggressive, yearslong rate-hiking campaign by the central bank to throw water on smoldering demand and tame decades-high inflation.
Inflation has cooled considerably after spiking to 9.1% annually in June 2022, and the economy has remained resilient in the process — although there are signals that the once-rampant pace of spending activity has cooled.
A separate report on Wednesday showed that US retail sales were flat in April.
“Potentially, that’s an indication of consumers getting tapped out,” John Sedunov, professor of finance and real estate at Villanova University, told CNN. “At the end of the day, that retail softening is an indicator that maybe there’s going to be less pressure on prices in certain areas going forward, which could have a continuing moderating effect on inflation.”
This story is developing and will be updated.