Top-line inflation declined to 8.3% in April, down from 8.5% in March, as core prices, which exclude food and energy, rose by 6.2% from a year ago.
Inflation in this business cycle most likely reached its zenith in March as transportation prices and other industrial goods declined in April relative to year-ago levels. The result was an easing of top-line inflation to 8.3% in April from 8.5% in March. But one does not get the sense that this is going to provide any relief to households experiencing a loss in purchasing power and to policymakers who will attempt to restore price stability without causing a recession. Core prices, which exclude food and energy, increased by 0.6% in April and were up by 6.2% from a year ago. Those costs where buttressed by a 0.5% increase in shelter and the policy-sensitive owners’ equivalent rent series. The former is now up by 5.1% from a year ago and the latter has increased by 4.8%. The number that jumps out in the core data was the 18.6% increase in airline fares. In addition, the 1.1% increase in new vehicles induced some distortion into the series as the Bureau of Labor Statistics introduced a new methodology in estimating those costs in April. Where there was improvement, it was inside the energy complex, which declined by 2.7% on the month, which followed the February and March price shocks of the war in Ukraine. Used car and truck costs declined by 0.4%.