Posted on 05/15/24
| News Source: The Hill
Inflation slowed in April after several months of faster-than-expected price increases, according to data released Wednesday by the Labor Department.
The consumer price index, a closely watched inflation gauge, rose 0.3 percent in April and 3.4 percent over the previous 12 months, in line with economist expectations. Both monthly and annual inflation fell 0.1 percentage points from their March levels.
The new inflation numbers come amid increasing concern among policymakers and investors over the path of price increases in the U.S. After falling sharply throughout the past two years, inflation had appeared to plateau with plenty of room left to fall toward the Federal Reserve’s target of 2 percent annual price increases.
Higher-than-expected inflation has forced the Fed to delay plans to cut interest rates from their current baseline of 5.25 percent to 5 percent, the highest level in more than two decades. Sticky inflation is also a major challenge for President Biden and Democrats, who are struggling to turn around public opinion about the economy ahead of the 2024 election.
Job growth has remained strong, the jobless rate has lingered under 4 percent for the longest stretch since the 1960s and the US economy has powered through predictions of recession. The U.S. has added a record number of jobs under Biden, who took office as the U.S. economy was crawling back from the COVID-19 recession, and the recovery took far shorter than many economists anticipated.
Even so, the surge of inflation that followed and its lingering impact on the economy has depressed consumer sentiment and Biden’s polling on economic issues.