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GDP growth lower than expected, inflation continues
The first-quarter GDP report shows inflation is increasing a lot faster than expected, which weakens opportunity for interest rate cuts anytime soon. Dan Varroney, economics expert, joins LiveNOW from FOX.
Inflation fell slightly in April, but a spike in the cost of rent and gasoline kept prices painfully high for millions of Americans.
The Labor Department said Wednesday that the consumer price index (CPI), a broad measure of how much everyday goods like gasoline, groceries and rent cost, rose 0.3% in April from the previous month. Economists expected to see a 0.4% monthly increase. Prices climbed 3.4% from the same time last year, down from the 3.5% reading in March.
"We’ve been saying for a long time now that inflation is remaining stubbornly elevated, and this report provides additional evidence that consumers are increasingly pessimistic that inflation is coming down soon," said Lisa Sturtevant, Bright MLS chief economist. "While consumers are facing higher prices at the pump, high housing costs also continue to be a main driver of the overall inflation numbers."
Here is a breakdown of where Americans are seeing prices rising and falling the fastest as they continue to wrestle with sticker shock.
INFLATION INCREASES 3.4% IN APRIL AS PRICES REMAIN ELEVATED
Rent
Housing costs were once again one of the biggest drivers of inflation last month. Rent costs rose 0.4% for the month and are up 5.6% from the same time last year.
Rising rents are concerning because higher housing costs most directly and acutely affect household budgets. Another data point that measures how much homeowners would pay in equivalent rent if they had not bought their home also climbed by 0.4% from the previous month.
"The shelter component of the CPI has come down since its 2023 peak, with shelter inflation coming in at 5.5% in April," Sturtevant said. "But unfortunately, there is evidence that rents are going to be on the rise in the second half of this year."
JAMIE DIMON WARNS INFLATION, INTEREST RATES MAY REMAIN ELEVATED
Food
FILE - Miami Beach, Florida, Publix grocery store supermarket, bread aisle, Natures Own and Wonder bread. (Photo by: Jeffrey Greenberg/Universal Images Group via Getty Images)
Food has been one of the most visceral reminders of inflation for Americans, but households finally got some reprieve in April.
The cost of groceries fell 0.2% last month, although they advanced 1.1% from the same time last year. Additionally, when compared with January 2021, before the inflation crisis began, grocery prices are up more than 21%.
The cost of eggs plummeted 7.3% in April. Consumers also paid less for bread (-0.2%), chicken (-0.8%), milk (-0.8%), fresh fruits (-1.7%), fresh vegetables (-0.6%), peanut butter (-1.1%) and coffee (-0.6%).
However, the price of other basics still rose last month, including cereal (2.2%), flour (3.2%), beef and veal (0.1%), ham (1.8%) and fish and seafood (0.3%).
AMERICANS ARE CARRYING A RECORD AMOUNT OF HOUSEHOLD DEBT
Energy
Energy prices jumped in April for the third straight month, adding to the financial pressure that many families are already enduring. Prices rose 1.1% during the month, including a 2.8% increase in gasoline.
The price of propane, kerosene and firewood rose 2.2% in April, and fuel oil inched 0.9% higher.
Cars
There was some good news for Americans looking to buy a car in April.
The cost of used vehicles – which were a major component of the inflation spike in 2022 – fell 1.4% last month and is down 6.9% year over year.
New car and truck prices also inched lower in April, declining 0.4%. Prices are down 0.4% from the same time last year.
However, there is another problem for car owners: rising insurance costs. Auto insurance jumped 1.8% in April, after rising the previous five months. On an annual basis, prices are up a stunning 22.6%.
Travel and Transportation
Airline tickets fell again in April, sliding 0.8%.
The cost of tickets is down about 5.8% when compared with last year, according to the data.