By Manuel Gutierrez, Consulting Economist to NKBA
Consumer prices in April rose 4.9 percent from a year earlier, marking the lowest annual increase in the past two years. The annual rate of price increases has been falling steadily since June of last year.
The price index rose 0.4 percent in April, however, which is significantly higher than the 0.1 percent gain in March and on par with the 0.4 percent increase in February. These surges suggest that inflation will remain on the horizon for a few months at least.
- The Core price index — which excludes the more volatile energy and food prices — also improved in April, with an annual increase of 5.5 percent. Although this index saw a month-over month increase of 0.4 percent, it remains lower than the 40-year high of 6.6 percent reached in the middle of last year.
- Transportation services and Flooring products saw the highest annual increases, 11.1 percent and 9.9 percent, respectively. However, compared to the previous month, both categories decreased by 0.2 percent. Food prices were 7.6 percent higher than a year ago, though they did not change from March. Housing — including both products and services used for housing maintenance and upkeep — was up by 7.4 percent year over year and up by 0.2 percent month over month.
- Five major product categories saw price declines compared to the previous year. Gasoline prices were down by 12.2 percent and Used Vehicles prices, which spiked over 40 percent two years ago, fell by 6.6 percent. Energy prices were down by 4.9 percent, followed by a 3.0 percent decrease in Window Coverings. Lastly, Household Appliances prices experienced a decline of 0.4 percent.
- A product category of particular interest to our members is Household Appliances, which is split into Major Appliances (e.g. refrigerators) and Other Household Appliances (e.g. toasters). Major Appliances prices fell in 10 of the previous 12 months, and in April, with a 3.4 percent decline. On an annual basis, prices were 10.4 percent lower. The Other Appliances category also saw price declines over the last year, though prices only fell in seven months out of 12, including a decrease of 0.9 percent in April. However, prices were still higher than a year earlier by 5.5 percent.