The April Consumer Price Index is forecast to rise 0.59% from the prior month and 3.7% on an annual basis. Gas prices vaulted more than 50% after the US- and Israeli-led war on Iran began in late February. The national average recently topped $4.50 a gallon.
Core inflation, which strips out food and energy, is expected to accelerate slightly in April. A technical adjustment to housing data will push the number higher. Last October’s government shutdown prevented data collection for owners’ equivalent rent, meaning April rent data will be measured against last April instead of the fall.
Consumer limits. Consumer sentiment slipped to a fresh record low in recent weeks. Consumer-facing companies like Kraft Heinz and McDonald’s are apprehensive about budget-constrained shoppers.
Federal Reserve officials will delay near-term interest rate changes while waiting for clarity on how higher energy costs bleed into underlying prices. The inflation pressure is showing up in three specific places:
- Gas prices are projected to rise 6% for the month.
- Core goods inflation remains muted at a forecasted 0.09% increase.
- Core services are expected to jump 0.41% due to higher rents, medical care, and airfares.
The upcoming figures will feed directly into the Federal Reserve’s preferred measure of inflation. The Consumer Price Index drops May 12 at 8:30 a.m. EDT.
