Economic Data and Growth

In April, consumer prices increased 0.6% from March and 3.8% over the year, up from the 3.3% annual rise in March and the greatest over-the-year increase since May 2023. Core CPI, which excludes more volatile energy and food prices, rose 0.4% from March and 2.8% over the year, up slightly from the 2.6% 12-month increase the month prior.

Energy costs climbed 3.8% over the month in April, after jumping 10.9% in March. Over the year, energy costs surged 17.9%, after increasing 12.5% year-over-year in March. Within the energy index, gasoline prices rose 5.4% in April and 28.4% over the year, while fuel oil prices surged 5.8% month-over-month and 54.3% year-over-year. Meanwhile, electricity prices grew 2.1% in April and 6.1% from April 2025, while natural gas prices edged down 0.1% over the month but were still up 3.0% over the year.

In April, food prices advanced 0.5% over the month and 3.2% over the year, up from the 2.7% year-over-year advance in March. Prices for food at home increased 0.7% from March and 2.9% from April 2025, while prices for food away from home moved up 0.2% month-over-month and 3.6% year-over-year. Of the different food groups, beef and veal, coffee and fresh vegetables rose at the fastest pace, surging 14.8%, 18.5% and 11.5% over the year, respectively.

The shelter index climbed 0.6% from March and 3.3% over the year, up from the 3.0% annual gain in March. Meanwhile, prices for used cars and trucks stayed the same over the month but declined 2.7% over the year, while new vehicle prices ticked down 0.2% over the month but inched up 0.2% from April 2025. Relatedly, prices for motor vehicle maintenance and repair fell 0.2% month-over-month but advanced 5.1% year-over-year.

The headline inflation rate is still well above the Federal Reserve’s target of 2.0% and continues to rise from its 2025 lows, with increased pressure from the war in the Middle East. Federal Reserve officials held their interest rate target steady at their April meeting, and markets anticipate that the Federal Open Market Committee will keep its interest rate target unchanged again at the meeting next month as risks to the Federal Reserve’s inflation mandate rise.