Consumer price growth in the United States reaches highest annual rate since 2008

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(RTTNews) – Partly reflecting a surge in prices for used cars and trucks, the Labor Department released a report on Wednesday showing that consumer prices in the United States rose much more than expected in the month of April.

The Labor Department said its consumer price index rose 0.8% in April after rising 0.6% in March. Economists expected consumer prices to rise 0.2%.

With the monthly increase much larger than expected, consumer prices in April rose 4.2% from the same month a year ago, reflecting the biggest jump since September 2008.

The stronger than expected consumer price growth in April was in part due to soaring prices for used cars and trucks, which climbed a record 10.0% and accounted for more than a third the increase in the consumer price index.

Food prices also rose 0.4% in the month, while energy prices edged down 0.1% after soaring in recent months.

Excluding food and energy prices, basic consumer prices rose 0.9% in April after rising 0.3% in March. Basic prices are expected to rise another 0.3 percent.

The much larger-than-expected jump in basic consumer prices reflects the largest increase since April 1982.

Along with soaring prices for used cars and trucks, higher prices for housing, air fares, recreation, auto insurance, and household furnishings and operations have also contributed to the decline. increase in basic prices.

Consumer staples prices rose 3.0% year-on-year, marking the largest annual increase since January 1996.

Michael Pearce, senior US economist at Capital Economics, called the figures “frightening” but said moderate gains in cyclical components of the consumer price index give weight to the Reserve’s argument. Federal government according to which the spike in inflation in April will be “largely transitory”. ”

“With more than 8 million jobs below its pre-pandemic level, we expect the Fed to maintain its accommodative line, even if, as we expect, inflation gains broaden in the near future. over the next few months, ”Pearce said.

On Thursday, the Labor Department is due to release a separate report on producer price inflation in April.

Economists had expected producer prices to rise 0.3% in April after jumping 1.0% in March. Basic producer prices are expected to rise 0.4% in April after rising 0.7% in March.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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