The price of goods and services in the US remained stubbornly high in April, rising 4.9% from a year earlier, the Labor Department reported on Wednesday.
The annual rate of inflation has fallen sharply since hitting a 40-year high of 9.1% last June. April’s increase nearly matched the 5% increase recorded in March. It was the tenth straight month that the rate has fallen, but prices continue to rise at a rate that is more than double the Federal Reserve’s target rate of 2% per year.
The latest Consumer Price Index (CPI), a widely followed measure of the costs of goods and services in the US economy, showed prices rose 0.4% for the month, versus a 0.1% increase in March.
Housing costs were the biggest contributors to the monthly increase, followed by increases in the used car and truck index and the gasoline index. Excluding food and energy price volatility, prices rose 0.4% in April, the same as in March.
Inflation in the US is noticeably lower than in other countries. In the UK, inflation was 10.1% in March, the latest month for which figures are available. It was 6.9% in the Eurozone.
Despite the downward trend, the Federal Reserve has continued to aggressively raise rates in its attempt to stem price rises. Last week, it announced its 10th rate increase since March of last year. Fed Chairman Jerome Powell has indicated that the central bank may pause raising rates while it assesses the impact of such increases. But Powell has made it clear that rates are likely to stay high as long as inflation stays high.
On Tuesday, New York Fed President John Williams warned that he expects inflation to remain a problem for some time despite the central bank’s actions.
“Due to the lag between policy actions and their effects, it will take time for the [Fed’s] actions to rebalance the economy and bring inflation back to our 2% target,” he told the Economic Club of New York.