"US annual inflation accelerated more than expected, with the consumer price index rising 3.8% in April from a year ago. Economists expected a 3.7% increase, and it's the highest inflation rate since 2023. CPI increased 0.6% from March, as expected, and was cooler than March's 0.9% rise. This, with a 0.2% increase in average hourly earnings, translates to real earnings dropping by 0.5% month over month."
"Core CPI, which excludes volatile food and energy prices, increased 2.8% from a year ago in April, just above the forecast of 2.7% and the previous 2.6% increase. Core CPI increased 0.4% from March, more than the previous 0.2% and the forecast of 0.3%. Energy prices increased 17.9% year over year, the largest increase since September 2022. More specifically, gas prices increased 28.4% year over year."
"Energy prices rose 3.8% month over month, cooler than March's 10.9% increase. AAA data showed gas prices have climbed to around $4.50 on average from just under $3 at the end of February when the Iran war started. Prices at the pump are likely leading lower-income households to modify their gas consumption, while higher-income households are mostly trucking along."
""Higher-income households have reduced real gas consumption only modestly and increased gasoline spending considerably compared with 2023," a Federal Reserve Bank of New York post said, based on spending data through March. "In contrast, lower-income households increased spending by much less and decreased real consumption by much more, potentially by carpooling or substituting to public transit where available." Gas prices are also likely taking a toll on people's feelings about the economy."
US consumer prices increased faster than expected in April, with CPI up 3.8% year over year and 0.6% from March. Core CPI rose 2.8% year over year and 0.4% from March, both above forecasts and prior readings. Energy prices increased 17.9% year over year, including a 28.4% rise in gas prices, while energy rose 3.8% month over month. Average hourly earnings rose 0.2%, leading to real earnings falling 0.5% month over month. Gas prices around $4.50 on average have likely changed consumption patterns, with lower-income households reducing real gas use more and spending less, while higher-income households reduced consumption modestly and increased gasoline spending. Consumer sentiment fell to a record low in May, with expectations tied to resolved supply disruptions and lower energy prices.
Read at www.businessinsider.com
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