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Inflation falls for first time in 2024, but remains higher than Federal Reserve's goal

Inflation eased in April after several months of rising costs.
Inflation, Food Shopping
Posted at 10:10 AM, May 15, 2024
and last updated 2024-05-15 13:10:48-04

The U.S. consumer price index, the government’s top measure for inflation, rose by 0.3% in April. That was slightly less than the increase of 0.4% in March. The price of goods and services increased by 3.4% in the 12-month period ending in April. The new inflation data was released Wednesday by the government's Bureau of Labor Statistics.

The inflation rate was 3.5% for the 12-month period ending in March and 3.2% for the year ending in February. April ended a streak of consecutive months of rising inflation. The consumer price index weighs the costs of goods based on their importance. Items like food, shelter and energy tend to be weighted more heavily.

The good news for consumers is that inflation for food purchased at grocery stores is low. In the 12 months ending in April, food meant to be consumed at home was 1.1% higher. Just a few years ago, annual food inflation topped 10%. Some grocery stores even appear to be lowering prices, as food at home was 0.2% lower in April than in March.

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The bad news is that shelter prices continue to rise. Shelter was 5.5% higher in April 2024 than a year earlier.

April marked 12 consecutive months with a consumer price index between 3% and 4%. With inflation failing to drop below 3%, the Federal Reserve has continued to keep interest rates at a five-decade high since late 2023. Higher interest rates are meant to lower inflation.

Wages are outpacing inflation. Average weekly earnings have increased by 3.9% in the last year, the Bureau of Labor Statistics said.