UNITED STATES NEWS

Americans likely saw little relief from inflation in April

May 9, 2023, 3:43 PM

WASHINGTON (AP) — After steadily declining for nearly a year, consumer price data to be released Wednesday will likely show that U.S. inflation remained stubbornly high in April, a sign that it might be entering a newer, stickier phase.

Consumer prices are forecast to have risen 0.4% from March to April, much faster than the 0.1% increase the previous month, according to a survey of economists by the data provider FactSet.

Compared with a year earlier, prices are projected to have jumped 5% in April, the same year-over-year increase as in March. If that forecast proves accurate, it would be the first time that annual inflation didn’t fall after nine months of declines.

Pricier gasoline, apartment rents and possibly used cars are among the items that might have accelerated inflation last month. The cost of airline fares and hotel rooms, by contrast, are expected to have eased after months of increases.

For more than two years, high inflation has been a significant burden for America’s consumers, an ongoing threat to the economy and a frustrating challenge for the Federal Reserve. Yet now, new problems are emerging.

The Fed has raised its key interest rate to a likely pullback in bank lending. The result could be a further weakening of the economy.

Even more ominously, the government’s debt ceiling a global economic crisis.

Inflation has slowed sharply since peaking at a 9.1% annual rate last June. Still, many economists say the decline so far has likely been the easy phase. The supply chain snarls that left many grocery shelves bare and delayed the delivery of furniture, cars and electronics have been resolved. Gas prices have also dropped steadily after having spiked in the wake of Russia’s invasion of Ukraine, though they rose again in April after OPEC agreed to reduce oil output.

Excluding volatile food and energy costs, so-called core inflation is also expected to have stayed high last month, with economists envisioning a 0.3% increase from March to April and 5.4% from a year earlier.

The Fed and many economists closely monitor core prices, which are regarded as a better measure of longer-term inflation trends. One major driver of core inflation — apartment costs and other housing expenses — surged 8.2% in March from 12 months earlier. Most economists expect apartment rents to grow much more slowly in coming months, helping to slow inflation, as more new apartment buildings are completed.

Chair Jerome Powell and other Fed officials are paying particular attention to the cost of services, excluding energy and housing. They consider rising services prices to be particularly sticky because they’re heavily fueled by wage increases.

Prices for restaurant meals, airline tickets and hotel rooms have risen steadily as companies have had to raise pay in those industries to find and retain workers. Restaurant prices jumped 8.8% in March from a year ago.

“The most persistent area of inflation is in core services excluding housing, which has been running around 4.5% since last August,” John Williams, president of the Federal Reserve Bank of New York, said Tuesday. Williams, who is close to Powell, is an influential voice in Fed policy.

“This is driven by a continued imbalance in overall supply and demand, and it will take the longest to bring down,” Williams said.

When they met last week, the Fed’s policymakers agreed to raise their benchmark rate by a quarter-point, the 10th straight increase, to about 5.1% — the highest level in 16 years. The Fed’s rate hikes, which are intended to cool spending, growth and inflation, have led to higher costs for mortgages, auto loans and credit card and business borrowing.

Most economists think the rate hikes will, over time, have their intended effect. Yet most also worry that the hikes will weaken the economy so much as to tip it into a recession sometime this year.

At last week’s meeting, the Fed signaled that it may now pause its rate hikes and take time to monitor the effects of its policy actions on the economy, which might take many more months to become fully evident.

United States News

...

KSL Podcasts/Ben Kuebrich

FBI investigates family friend ‘Uncle Hilty’ in kidnapping case

The FBI turns its focus on family friend 'Uncle Hilty' in a high-stakes kidnapping case after uncovering inconsistencies and crucial evidence.

2 hours ago

Associated Press

The Latest | Trump’s hush money trial enters its final leg with closing arguments set to begin

NEW YORK (AP) — Closing arguments in Donald Trump ‘s historic hush money trial are set to begin Tuesday morning, giving prosecutors and defense attorneys one final opportunity to convince the jury of their respective cases before deliberations begin. Jurors will undertake the unprecedented task of deciding whether to convict the former U.S. president of […]

3 hours ago

Associated Press

In Trump’s hush money trial, prosecutors and defense lawyers are poised to make final pitch to jury

NEW YORK (AP) — Prosecutors and defense lawyers in Donald Trump’s hush money trial are set to deliver closing arguments to the jury Tuesday, each side looking to score final points with the panel before it starts deliberating the fate of the first former American president to be charged with felony crimes. The arguments, expected […]

9 hours ago

Associated Press

Nobody hurt after plane’s engine catches fire at Chicago O’Hare airport

CHICAGO (AP) — A commercial airliner’s engine caught fire Monday at Chicago O’Hare International Airport, the Federal Aviation Administration said. United flight 2091 to Seattle-Tacoma International Airport aborted takeoff after flames were reported around 2 p.m. while the aircraft was still on the taxiway, the FAA said. The airline said the plane, an Airbus A320, […]

14 hours ago

Associated Press

81-year-old arrested after police say he terrorized a California neighborhood with a slingshot

AZUSA, Calif. (AP) — An 81-year-old man who investigators say terrorized a Southern California neighborhood for years with a slingshot has been arrested, police said. While conducting an investigation, detectives “learned that during the course of 9-10 years, dozens of citizens were being victimized by a serial slingshot shooter,” the Azusa Police Department said in […]

18 hours ago

Associated Press

Man convicted of Chicago murder based on blind witness’ testimony sues city, police

CHICAGO (AP) — A Chicago man convicted of murder based in part on testimony from a legally blind eyewitness is suing the city and the police department. A judge convicted Darien Harris in 2014 in connection with a fatal shooting at a South Side gas station in 2011. He was 12 years into a 76-year […]

18 hours ago

Sponsored Articles

...

Day & Night Air Conditioning, Heating and Plumbing

Beat the heat, ensure your AC unit is summer-ready

With temperatures starting to rise across the Valley, now is a great time to be sure your AC unit is ready to withstand the sweltering summer heat.

...

DESERT INSTITUTE FOR SPINE CARE

Desert Institute for Spine Care is the place for weekend warriors to fix their back pain

Spring has sprung and nothing is better than March in Arizona. The temperatures are perfect and with the beautiful weather, Arizona has become a hotbed for hikers, runners, golfers, pickleball players and all types of weekend warriors.

...

Midwestern University

Midwestern University Clinics: transforming health care in the valley

Midwestern University, long a fixture of comprehensive health care education in the West Valley, is also a recognized leader in community health care.

Americans likely saw little relief from inflation in April