The Untold Story Of Inflation

The fourth U.S. CPI release of this Jubilee Year rolled in with a modest +0.2% month-on-month rise—below the +0.3% forecast and a bounce from March’s miraculous -0.1% dip. Year-on-year, inflation clocked in at +2.3%, just shy of the +2.4% expectation and a tick down from March’s +2.4%. Energy kept playing the deflation hero, goods stayed in their deflationary funk (just a little less gloomy), food prices took a breather, and services delivered their smallest monthly increase since the ancient times of December 2021. All in all, a Goldilocks report… if you squint hard enough.

Core CPI rose by 0.3% month-on-month in April, beating expectations of +0.2% and up from March’s +0.1%. On a year-on-year basis, core CPI climbed 2.8%, exactly in line with forecasts and unchanged from March, once again marking the lowest annual increase since March 2021. Core services—which make up a hefty 76% of the core CPI—eased slightly from +2.79% to 2.73% YoY, while core goods turned inflationary year-on-year for the first time since December 2023. And for the trivia lovers: this marks the 59th straight month of rising core CPI. But hey, who’s counting?

A glimmer of hope for those still clinging to the “inflation is over” narrative: Owners' Equivalent Rent—the inflation metric that just won’t quit—rose only 4.3% year-on-year in April. That’s down a hair from March’s 4.4% and the “coolest” it’s been since March 2022. So yes, inflation is definitely vanquished… if you squint hard enough.

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