The Consumer Price Index (CPI) stood at 4.9% in April, down 0.1% from March, according to data released by the Bureau of Labor Statistics (BLS).
Analysts expected inflation in April to remain at 5%, the same level as March's level. This decline shows that the CPI deceleration trend is still underway, albeit at a very slow pace. This is the 10th consecutive month that the CPI has dropped.
Core inflation falls
Core inflation, which excludes food and energy, declined from 5.6% in March to 5.5% in April.
"The index for shelter was the largest contributor to the monthly all items increase," followed by increases in fuel and used car prices. Energy rose 0.6% in April (after falling 3.5% in March) and the food at home index fell 0.2%, while food away from home rose 0.4%. According to the report:
The increase in the gasoline index more than offset declines in other energy component indexes, and the energy index rose 0.6% in April. The food index was unchanged in April, as it was in March. The index for food at home fell 0.2% over the month while the index for food away from home rose 0.4%.
On an annual basis, the energy index decreased by 5.1% in the past 12 months, and the food index increased by 7.7% in the last year.
Influence on the Fed and interest rate hikes
Last week, the Federal Reserve (Fed) hiked interest rates by 25 basis points, with a new target range between 5% and 5.25%, the highest in the last 16 years. The CPI data will determine whether the Fed decides to continue raising rates or pause. Experts predict that the rate will begin to decline during the second half of the year.
The constant moderation of the CPI in recent months has generated optimism in the financial markets.
