A key price gauge showed inflation easing for a 10th straight month in April, raising expectations that the Federal Reserve will pause the fastest series of interest-rate increases since the 1980s. The Consumer Price Index rose 4.9% from a year earlier, after rising 5% in March — the smallest annual increase since April 2021. But prices rose a monthly 0.4% in April, compared with 0.1% in March, driven mostly by the costs of housing, used vehicles and fuel, the Bureau of Labor Statistics report showed Wednesday. While the annual rate of inflation has fallen by almost half since June, it’s still well above the Fed’s 2% annual target.
A so-called core gauge of prices, excluding food and energy, slipped to an annual 5.5% increase in April, from 5.6% in March, and held at a monthly 0.4% gain.
Baby formula and food prices jumped a record 4.3% in the month and 8.8% in the year, as producers cited the cost of meeting new federal guidelines aimed at preventing contamination.
The Fed hinted it would pause rate increases when it last met and raised its target benchmark rate to between 5% and 5.25% — the highest since 2007.
