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Consumer prices increased 0.2% over the month and 2.3% over the year in April, slowing from the 2.4% rise in March to the slowest over-the-year increase in more than four years. Core CPI, which excludes more volatile energy and food prices, edged up 0.2% over the month and rose 2.8% over the year, the same as the 12-month increase in March.

Energy costs increased 0.7% over the month in April, driven by a 3.7% hike in the utility (piped) gas service index, but fell 3.7% over the year. On the other hand, the rise in the utility (piped) gas service index was offset partially by an over-the-month decrease in the index for fuel oil (down 1.3%).

Food prices dipped slightly in April, falling 0.1% over the month, driven primarily by a 12.7% decrease in the index for eggs, but were still up 2.8% over the year in April. The food at home index fell 0.4% from March, the largest decline in that index since September 2020, but increased 2.0% from April 2024. Meanwhile, food away from home rose 0.4% in April and 3.9% over the year.

Shelter grew 0.3% over the month and 4.0% over the year, consistent with the 12-month increase in March. Meanwhile, prices for transportation services edged up 0.1% over the month and rose 2.5% over the year, with motor vehicle insurance and motor vehicle maintenance and repair leading the increase, surging 6.4% and 5.6% over the year, respectively. On the other hand, airline fares declined 2.8% over the month and 7.9% over the year, partially offsetting some of the increase in the transportation services index.

Although the over-the-year headline inflation rate continues to tick down, risks of higher inflation have risen. In the press conference following the May meeting, Federal Reserve Chairman Jerome Powell indicated that the Federal Open Market Committee will keep its policy stance consistent until notable changes to inflation or the labor market are seen in the data. Therefore, markets are anticipating that the FOMC will keep rates steady at its meeting in June.