Driven by the decline in food and automobile prices, Inflation in the United States fell slightly last month after reporting high numbers on three occasions, likely offering a tentative sign of relief to Federal Reserve officials as well as President Joe Biden’s re-election team.
Consumer prices rose 0.3% from March to April, the Labor Department reported Wednesday, down slightly from 0.4% the previous month.
Measured year-on-year, inflation fell from 3.5% to 3.4%. And a measure of core inflation, which excludes volatile food and energy prices, fell to its lowest level in three years.
Inflation was unexpectedly high in the first three months of this year, after falling steadily in the second half of 2023. The high numbers have dampened hopes that the worst run of inflation in four decades was being quickly brought under control.
If inflation continues its decline, it could have a major effect on the presidential race. Republicans have sought to shift the blame for high prices to President Joe Biden, using it to try to derail his re-election campaign.
While employee hiring remains strong and wage growth is, on average, healthy, prices generally remain well above their pre-pandemic levels.
This Wednesday’s report could provide a dose of reassurance that the pace of price increases could slow down again. Although the latest figures show inflation running well above the Fed’s target of 2%, it is the first time this year that the year-over-year figure has fallen.
And price increases slowed in some service industries, such as hotels, health care and auto repair, which had kept inflation high.
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