US consumer prices rise less than expected in April; core CPI slows
WASHINGTON - U.S. consumer prices increased less than expected in April, suggesting that inflation resumed its downward trend at the start of the second quarter in a boost to financial market expectations for a September interest rate cut.
The annual increase in consumer prices has dropped from a peak of 9.1% in June 2022, though progress has stalled. Inflation accelerated in the first quarter amid strong domestic demand after moderating for much of last year.Economists say inflation is being driven by providers of services like motor vehicle insurance, housing and healthcare catching up to higher costs.
That sentiment is shared by Fed Chair Jerome Powell who said on Tuesday "I expect that inflation will move back down ... on a monthly basis to levels that were more like the lower readings that we were having last year."A handful of economists anticipate the Fed will commence its easing cycle in July, while another minority believes a rate cut could come in December, if at all.
Excluding the volatile food and energy components, the CPI rose 0.3% in April after advancing 0.4% in March. In the 12 months through April, the core CPI increased 3.6%. That was the smallest year-on-year gain since April 2021 and followed a 3.8% increase in March.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.
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