US inflation meets expectations, slows to 3.4% in April

The annual rate of consumer price inflation in the US slowed in line with expectations last month.

Housing and gasoline costs contributed the most to the overall price level increase in April.

The Consumer Price Index (CPI), as per the Bureau of Labor Statistics, climbed by 3.4% year-on-year (YoY) in April, compared to 3.5% in March.

The core CPI, excluding food and energy prices, slowed to 3.6% in April from 3.8% in March, its lowest rate since April 2021.

On a monthly basis, the CPI increased by 0.3% last month after a 0.4% rise in March. The core CPI also rose by 0.3% in April after a 0.4% increase in the previous three months.

The annual inflation rate in the US has significantly declined from its peak of 9.1% in June 2022. However, the slowing momentum in early 2023 has raised investor concerns about prolonged monetary tightening.

This concern is heightened by the ongoing strength in the labor market, adding to the risks of persistent inflationary pressures in the world’s largest economy.

Data showed that monthly increases in housing and gasoline prices accounted for more than 70% of the overall price rise in April.