WASHINGTON — An important inflation measure reached its peak level in three years during April, providing fresh evidence that climbing gasoline and grocery prices are putting financial pressure on American households.
The Commerce Department reported Thursday that inflation climbed to 3.8% in April when measured against the same period last year, rising from March’s 3.5% and marking the steepest increase since May 2023. Month-to-month, costs increased 0.4%, which represents a slowdown from March’s 0.7% surge.
The data revealed that numerous products beyond gasoline have experienced price increases, suggesting that inflation may continue and create challenges for congressional Republicans during this year’s midterm elections. The inflation rate also remains well above the Federal Reserve’s 2% goal, potentially leading Fed officials to avoid reducing their primary short-term interest rate this year. Several officials have indicated their next action might involve raising rates instead of lowering them.
When removing the unpredictable food and energy sectors, core inflation increased to 3.3% in April from the prior month’s 3.2%. This represents the steepest core measurement since November 2023. However, the report contained one encouraging element: Core prices advanced only 0.2% from March to April.
Rising costs are also diminishing consumers’ purchasing power, as incomes remained flat between March and April. When accounting for inflation, incomes actually decreased by 0.1% during the month.
