Source: Fortune
Summary
The US inflation rate accelerated to 3.8% in April, the highest level in three years, driven by spiking gas prices and higher food costs. The Commerce Department reported that prices rose 0.4% on a monthly basis, down from the 0.7% jump in March. Core inflation, excluding food and energy, rose to 3.3%, the highest since November 2023. Consumers’ incomes were unchanged in April, and adjusted for inflation, actually slipped 0.1%. The Federal Reserve’s target inflation rate is 2%.
Our Reading
The numbers tell one story.
Inflation jumps to 3.8%, the highest in three years. Gas prices and food costs squeeze Americans’ finances. Core inflation rises to 3.3%, above the Fed’s target. Consumers’ incomes slip 0.1% when adjusted for inflation. The Fed’s next move might be a rate hike, not a cut. Inflation becomes a problem for congressional Republicans before the midterm elections.
The economy enters a familiar phase: higher prices, stagnant incomes, and a cautious Fed.
Author: Evan Null
