May 12 (UPI) — Prices for consumer goods rose faster than expected in April, with food and energy prices driving the spike, the Bureau of Labor Statistics said Tuesday.
The Consumer Price Index for All Urban Consumers increased 0.6% on a seasonally adjusted basis in April, after rising 0.9% in March, the BLS said. Over the past 12 months, the all-items index increased 3.8% before seasonal adjustment.
The energy index rose 3.8% in April, which was more than 40% of the increase. That put the 12-month rise at 17.9%. The gasoline index rose 28.4% annually.
Airline fares rose 2.8%, making the 12-month rise at 20.7%, CNBC reported.
Food prices rose 0.5% for the month. The price of food at home rose 0.7%, which is the biggest monthly rise since August 2022, CNBC reported. The price for food away from home increased 0.2%, the BLS said.
When excluding energy and food, prices rose 0.4% in April. Those prices are calculated from household furnishings and operations, airline fares, personal care, apparel and education. That number puts inflation higher than the 2% goal set by the Federal Reserve, with the monthly rate at its highest since January 2025.
But the index for new vehicles, communication and medical care decreased in April. New vehicles and communication declined 0.2%, while medical care declined 0.1%. Used vehicle prices stayed flat.
Workers are feeling the pinch, too, as real average hourly wages dropped 0.5% for the month and 0.3% annually.
“Inflation is the key drag on the U.S. economy now,” said Heather Long, chief economist at Navy Federal Credit Union, CNBC reported. “This is hurting Americans. There is a real financial squeeze underway. For the first time in three years, inflation is eating up all wage gains. This is a setback for middle-class and lower-income households and they know it.”
Whether the Fed will lower interest rates in the wake of rising inflation is a concern for economists.
“Given that inflation is heading in the wrong direction and the labor market is holding up, it’s very unlikely that the Fed will be able to lower interest rates any time soon, and it’s possible that we may start pricing in rate hikes for next year,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management, CNBC reported.
