Inflation slowed in April after months of faster-than-expected price increases, according to data released Wednesday by the Labor Department.
The Consumer Price Index (CPI), a closely watched inflation indicator, rose 0.3% in April and rose 3.4% over the past 12 months, in line with economists’ expectations. Both the monthly and annual inflation rates fell by 0.1 percentage points from March levels.
The new inflation figures come amid growing concern among policymakers and investors about the path of U.S. price increases. Inflation is on track to reach the Fed’s 2% target after falling sharply throughout the past two years. Yearly price increases that appeared to have plateaued, leaving plenty of room for declines.
Higher-than-expected inflation has forced the Fed to postpone plans to cut interest rates from the current 5.25 level to 5%, the highest level in more than 20 years. Persistent inflation is also a major challenge for President Biden and the Democratic Party, which is struggling to turn around public opinion on the economy ahead of the 2024 election.
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