US inflation posted its biggest monthly increase since 2023, rising 0.6% in April, according to the latest figures released by the Bureau of Labor Statistics (BLS). The figure was in line with the median estimate of analysts and marked the largest jump since October 2020. Core prices, which exclude food and energy, rose 0.9%, the highest since April 2023. The increases were mainly driven by higher prices for transportation services, recreation, medical care, and housing.
The latest reading indicates inflation is heating up for the first time since the pandemic began last year. This follows a 0.3% increase in March and the 0.4% rise in February. In spite of this, inflation is still below the Federal Reserve’s 2% target.
At the same time, the consumer price index, which measures the prices of all goods and services, has now increased by 3.6% in the past 12 months. This is the largest annual increase since 2023.
Overall, the data suggest that inflation is beginning to rise as the economy recovers from the pandemic. This could potentially provide further impetus to the Fed’s current policy of keeping interest rates near zero. However, it is important to keep in mind that inflation could also be artificially boosted by the government’s stimulus measures, which could lead to more rapid inflation later on.
