US CPI inflation in April 2024 was no surprise to economists

After three consecutive negative surprises, this time inflation statistics from the US turned out to be consistent with the market consensus. However, this does not mean that inflation is no longer a problem.

In April 2024, the US CPI inflation rate is 3.4%. – Reported by the state Bureau of Labor Statistics (BLS). Average forecast of economists He told us to expect a result of 3.4%.. now The Federal Reserve Bank of Cleveland modelThe dynamics of the CPI for April will reach 3.50%.

( based on BLS data)

During the first three months of 2024, US CPI inflation surprised economists negatively and, instead of falling, rose. Overall, since July of last year, the consumer inflation rate in the United States has not declined, ranging from 3.0% to 3.7%. Moreover, April It was the 38th consecutive month that annual US CPI growth exceeded 2%.

The Fed’s target has been consistently exceeded

Compared to March, consumer goods basket prices rose by 0.3% – slightly lower than in March and February (when they rose by 0.4% m/m) and after a 0.3% m/m increase in January. The average monthly increase in the US CPI for the past six months rose to 0.28%. If this situation continues over the next 12 months, annual US CPI inflation will reach 3.45%. This represents approximately one and a half percentage points above the Federal Reserve’s inflation target.

Core inflation, the index that excludes fuel, food and energy, also remained above target. Core CPI in April was 0.3% monthly and 3.6% yearly. Although the annual dynamics were the lowest in three years, they are still very high and have been decreasing very slowly for almost half a year. Economists expected a reading of 0.3% m/m and 3.6% compared to 0.4% m/m and 3.8% m/m recorded in March.

( based on BLS data)

High core inflation indicates that inflationary pressures in the world’s largest economy remain strong. Key measures of US consumer price inflation remain above the Federal Reserve’s 2 percent target. We have long since passed the dynamic phase of disinflation, and further declines in CPI inflation are much more difficult than last year.

The nuances of US inflation

On the other hand, it is worth taking into account the fact that the CPI statistics are slightly artificially inflated due to delays in transferring data from the real economy to the BLS’s total housing needs (shelter) costs. In April, “prices” in this category showed an increase of 0.4% on a monthly basis and 5.5% on an annual basis, although everyone knows that this indicator is still “witnessing” increases in rents and house prices from 2021 to 2022 and that In the following months the dynamics of “prices” in this category should decrease.

In April, the CPI also rose due to higher fuel prices. The price of gasoline rose by 2.8% compared to March, when it rose by 1.7% on a monthly basis after a 3.8% increase on a monthly basis in February. But this is not the primary concern of the US monetary authorities. The cost of services, excluding energy supplies, increased by 0.4% compared to March, and 5.3% compared to last year. Price pressure in the services sector is the main force currently driving CPI inflation in the world’s largest economy.


Krzysztof Colanyi

Chief Analyst at

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