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Inflation dropped by one-tenth of one percent in April, according to the Labor Department.
The Consumer Price Index fell to 3.4% in April compared to 3.5% in March. The closely watched « core » rate of inflation that excludes food and fuel costs rose 3.6% in April. That’s the lowest increase since April of 2021.
This is more than a year since the Fed began to jack up interest rates in an effort to cool inflation. The Federal Reserve’s target rate of inflation is 2%, and even with the slight drop., the rate still has a long way to fall to reach that goal.
“I would characterize it as a small step in the right direction,” said Stephen Stanley, chief U.S. economist at Santander.
The New York Times sounds positively jubilant.
The slowdown will likely come as welcome news to consumers, and as a relief to policymakers at the Federal Reserve, who have been concerned that they were losing ground in their fight against inflation. But economists cautioned that one month of encouraging data was far from enough to set those worries to rest.
Fed Chairman Jerome Powell is more realistic.
“We did not expect this to be a smooth road,” Powell said at a discussion in Amsterdam on Tuesday.
