On Wednesday, May, 2024, the US Bureau of Labor Statistics released it latest reading on the Consumer Price Index (CPI).
The CPI for All Urban Consumers (CPI-U), which represents about 87% of the US population, increased 0.3% in April on a seasonally adjusted basis. This is slightly lower than February and March both of which each saw a 0.4% increase on all items. The all items index is up 3.4% for the last 12 months–below March’s 3.5%
On all items less food and energy, the CPI-U also increased 0.3% and is up 3.6% for the last 12 months, which is also lower then March’s 3.8% increase.
“While Core CPI came in right on consensus, the miss in headline inflation is great news for rate cut dreamers in the short-term,” said financial analyst Oskar Vårdal.
The food index was unchanged in April, following a slight incline of 0.1% in March, with food at home actually seeing a 0.2% decrease.
In April, like in March, the energy index rose 1.1%. The gasoline index increased 2.8%, seasonally adjusted, and fuel oil increased 0.9%.
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On the flip side, the index for natural gas saw a 2.9% decrease, and electricity declined 0.1%.
Shelter was up 0.4% in April, same as March and February.
“In general, April was a weak month across our live-gauges of the US economy, and the CPI was no exception,” explains Vårdal. “Food and shelter showed no signs of reacceleration despite the reacceleration seen in PPI and other forward-looking indicators for the 2 components, and transportation services cooled, which have been a concern over the past few months.”
He further elaborated that,
“However, this better not be a one-off for cuts to come into play from the Fed. The Powell indicator (Core ex housing) printed at levels too hot for comfort, and most annualized metrics still print at levels >3%, which is not an argument to cut rates."
