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Economy in Brief

U.S. Consumer Price Increase Slows During April
by Tom Moeller  May 11, 2022

• Core price index gain strengthens.

• Energy prices decline but food prices rise.

• Services prices strengthen while core goods prices rise modestly.

Pricing power overall at the retail level moderated in April, but the details show evidence of continued pricing strength. The Consumer Price Index rose by 0.3% last month as expected in the Action Economics Forecast Survey, following an unrevised 1.2% March rise. The 8.3% y/y gain was below the 8.5% y/y pace set in March and stood a hair under the previous peak 8.4% y/y set in January 1982.

Prices excluding food & energy rose an expected 0.6% last month, doubling the March rise. It was the strongest increase in three months. The 6.2% y/y gain jumped from a recent low of 1.3% y/y set in February 2021.

A 2.7% decline (+30.3% y/y) in energy prices led the moderation in pricing strength overall during April, following an 11.0% March increase. Gasoline prices fell 6.1% (+43.6% y/y) after reaching a record high in March. Fuel oil prices, however, surged 2.7% (80.5% y/y). Natural gas prices strengthened 3.1% (22.7% y/y) while the cost of electricity rose 0.7% (11.0% y/y).

Food prices remained strong last month, rising 0.9% (9.4% y/y) which was similar to the increases in each of the prior three months. Meat, poultry, fish & egg prices rose 1.4% (14.3% y/y). Cereal & bakery product prices also were strong and gained 1.1% (10.3% y/y). These increases were offset by a 0.3% decline (+7.8% y/y) in fruit & vegetable prices.

Services prices rose 0.7%. The 4.9% y/y gain compared to 1.3% y/y at the start of 2021. The cost of public transportation surged 12.1% (21.8% y/y). Shelter costs increased 0.5% (5.1% y/y). The owners' equivalent rent of primary residences gained 0.5% (4.8% y/y) as rents of primary residences rose 0.6% (4.8% y/y). The cost of medical care services increased 0.5% (3.5% y/y). Recreation services prices gained 0.4% (4.4% y/y) while education prices edged 0.2% higher (1.7% y/y).

Goods prices excluding food & energy rose 0.2% (9.7% y/y) in April after a 0.4% March decline. Price changes within categories were mixed. Used car & truck prices weakened 0.4% (+22.7% y/y), the third straight monthly decline, but new vehicle prices rose 1.1% (13.2% y/y). Education & communication product prices fell 2.6% (-4.0% y/y) as recreation product prices gained 0.5% (4.0% y/y). To the upside, home furnishings prices rose 0.5% (10.6% y/y) but household appliance prices fell 0.5% (+7.8% y/y). Apparel prices declined 0.8% (+5.4% y/y).

The Consumer Price Index data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.

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