Breitbart Business Digest: Underlying Inflation Is Still Running Hot

The April inflation report will keep the Federal Reserve on track to pause rate hikes at its meeting next month.

The consumer price index (CPI) was up 4.9 percent compared with a year ago, slightly below the five percent 12-month gain seen in March and the five percent forecast by economists. This is the tenth straight month of declines in the year-over-year pace of inflation.

On a monthly basis, however, inflation re-accelerated, rising 0.4 percent after the mild 0.1 percent in March. That puts another check in the April acceleration column on the recession scorecard we’ve been keeping for the past several weeks. It sits alongside the April jobs numbers and the S&P Global purchasing manager indexes as an indicator that the economy may have regained some steam as the green shoots of April pushed up through the soil.

Core prices, which exclude food and energy, are basically going nowhere. They rose 0.4 percent in April, just as they had in March and only slightly below February’s 0.5 percent. This was in line with expectations, which only goes to show that expectations have caught up with the fact that core inflation has become sticky. 

On a year-over-year basis, core prices were up 5.5 percent, a smidge below the 5.6 percent recorded in March and also in line with expectations. To put that into context, this is highly elevated compared to where forecasters thought we would be as we entered the second quarter of this year. Inflation is remaining much more persistent than expected just a few months ago.

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