Consumer Price Data Show Slight Deflation in April
Fed governors and market gurus have been warning about the threat of inflation to the United States economy -- but there remains no sign of prices rising at
Jul 31, 202025K Shares1M Views
Fed governors and market gurus have been warning about the threat of inflation to the United States economy — but there remains no sign of prices rising at worrying rates. Indeed, this morning, the Bureau of Labor Statistics reporteda slight deflation in the price of consumer goods in April — a decline of 0.1 percent. Over the past year, the Consumer Price Index has increased 2.2 percent.
The single-month downturn does not signal that the United States is in for a troubling period of deflation. It is due to a drop in energy commodity prices, particularly a 2.4 percent decline in the cost of gasoline. Most other prices, for things like food and cars, drifted slightly upward. Core CPI — a better measure of underlying inflation — did not budge in April. Year-over-year, it is 0.9 percent, the lowest rate since 1966.
Were the CPI to show stronger growth, indicating increasing inflation, it would put pressure on the Federal Reserve to raise short-term interest rates.
Hajra Shannon
Reviewer
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