CUNA Senior Economist Dawit Kebede issued the following statement in response to the Labor Department’s April Consumer Price Index (CPI) Report:
“In April, the year-over-year headline inflation decreased slightly from 5% in March to 4.9%. However, the core inflation, which excludes volatile food and energy items, increased to 5.5%. The rise in core prices was mainly due to the increase in housing and used car prices.
“The price of used cars and trucks, which had been declining for several months, unexpectedly increased by 4.4% in April, making a significant contribution to monthly inflation. In contrast, the price of new cars decreased for the first time in over six months by 0.2%. Although still large, the contribution of housing to monthly inflation continues to decline, with shelter prices increasing by 0.4%, down from a peak of 0.8% a couple of months ago.
“To measure the underlying inflation that is predictive of future prices, the Federal Reserve tracks the trend in ‘super core’ inflation, which excludes food, energy, shelter, and used car prices. This measure excludes the usual volatile elements, lagged housing indicator, and vehicle prices impacted by production challenges. According to this measure, the April CPI report shows that inflation is easing, as the three items except food are the major contributors to the monthly increase. This data supports the decision by the Federal Reserve to pause future rate hikes.”