Sunday, December 8, 2024
HomeBusiness and FinanceHere’s the inflation breakdown for April 2023 — in one chart

Here’s the inflation breakdown for April 2023 — in one chart

[ad_1]

A shopper in Greenville, New York, on April 30, 2023.

Robert Nickelsberg | Getty Images News | Getty Images

Since the CPI reading was a positive number in April, it means consumers didn’t see prices falling, in a broad sense. But it shows that the rate at which they’re rising has slowed significantly from the 9.1% peak in June 2022.

Policymakers aim to keep inflation at about 2% a year. It may take another year or so to reach that target, but “we’re definitively headed in that direction,” Zandi said.

Where consumers saw prices fall in April

Consumers saw average prices decline outright in April in certain categories.

Grocery prices, for example, retreated by 0.2% during the month, following a 0.3% decrease in March — a trend that should continue as supply chains continue to normalize, as do costs for labor and diesel (a key input for transportation from farm to shelf), economists said.

Monthly prices also declined for airline fares, new cars, hotels, and household energy (like electricity, fuel oil and utility gas service), among others.

Where consumers saw prices rise in April

Ramit Sethi: How renting could make you richer than buying

“It looks like inflation in the [shelter] category has peaked,” Andrew Hunter, senior U.S. economist at Capital Economics, said.

Overall, households are faring much better than they were months ago relative to inflation in staples like food, energy and housing, according to Zandi at Moody’s Analytics.

“Gas prices are way down from where they were a year ago.” he said. “Food prices are no longer rising quickly.

“And rents are now flat to down,” Zandi added. “Those are the key items in people’s budget and all of them feel pretty good at this point in time.”

Why inflation surged to multi-decade highs

Increasingly, we can be confident that inflation is coming back in.

Mark Zandi

chief economist of Moody’s Analytics

As the pandemic economy reopened, businesses rushed to hire workers and job openings surged to record highs. That demand tilted the job market in favor of workers, who had ample opportunities. They saw wages grow at their fastest pace in decades as employers competed to hire them.

That strong wage growth has nudged employers — especially labor-intensive service businesses — to raise their prices, economists said.

But now, “the earlier extreme levels of excess demand for workers are easing,” Hunter said.

Those labor-market dynamics should continue to put downward pressure on overall inflation.

“The trend from here is definitely looking a lot better,” Hunter said. “I think we’re finally seeing clear signs of progress.”

[ad_2]

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -
Google search engine

Most Popular

Recent Comments