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Inflation rate eases to 4.9% in April, less than expectations



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A widely followed measure of inflation rose in April, though the pace of the annual increase provided some hope that the cost of living will head lower later this year.The consumer price index, which measures the cost of a broad swath of goods and services, increased 0.4% for the month, in line with the Dow Jones estimate, according to a Labor Department report Wednesday.related investing news 20 hours agoHowever, that equated to an annual increase of 4.9%, slightly less than the 5% estimate and the lowest annual pace since April 2021. The annual rate was 5% in March.Excluding volatile food and energy categories, core CPI rose 0.4% monthly and 5.5% from a year ago, both in line with expectations.Increases in shelter, gasoline and used vehicles pushed the index higher, and were offset somewhat by declines in prices for fuel oil, new vehicles and food at home.Markets reacted positively to the news, with futures turning positive as Treasury yields were lower.”Today’s reports suggests that the Fed’s campaign to quell inflation is working, albeit more slowly than they would like,” said Quincy Krosby, chief global strategist at LPL Financial. “But for financial markets … today’s inflation print is a net positive.”Inflation has been persistent despite the Federal Reserve’s efforts to bring down prices. Starting in March 2022, the central bank has enacted 10 consecutive interest rate increases totaling 5 percentage points, taking benchmark borrowing rates to their highest level in nearly 16 years.The CPI reading has cooled considerably since peaking out around 9% in June 2022. However, inflation still has held well above the Fed’s 2% annual target.The report provides both good and bad news on the inflation front as Fed officials weigh their next move on rates.Shelter costs, which make up about one-third of the CPI weighting, increased another 0.4% on the month an …

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