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Consumer Prices in U.S. Increase by Most Since 2009

Economic IndicatorsMay 12, 2021 13:47
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2/2 © Bloomberg. Shoppers wear protective masks inside the Glendale Galleria shopping mall in Glendale, California, U.S., on Thursday, May 6, 2021. Los Angeles County and San Francisco County have reached a threshold to enter California’s most lenient yellow Covid-19 tier this week, setting the stage for the economy to be unshackled to the widest extent currently possible. Photographer: Bing Guan/Bloomberg 2/2

(Bloomberg) -- U.S. consumer prices climbed in April by the most since 2009, amid a record increase in used-car costs and signaling a build-up in inflationary pressures as burgeoning demand gives companies latitude to pass on higher costs.

The consumer price index increased 0.8% from the prior month after a 0.6% gain in March, according to Labor Department data Wednesday. Excluding the volatile food and energy components, the so-called core CPI rose 0.9% from March.

The median forecasts in a Bloomberg survey of economists called for a 0.2% in the CPI and a 0.3% gain in the core measure.

The annual CPI figure surged to 4.2%, distorted by the comparison to the pandemic-depressed index in April 2020. This phenomenon -- known as the base effect -- will skew the May figure as well, likely muddling the ongoing inflation debate.

While Federal Reserve officials and economists acknowledge the temporary boost, it’s unclear whether a more durable pickup in inflationary pressures is underway against a backdrop of soaring commodities costs, trillions of dollars in government economic stimulus and incipient signs of higher labor costs.

The core CPI measure, which was also biased higher by the base effect, rose 3% from 12 months ago. For the last year the annual core inflation metric has held below 2%.

Wednesday’s report offers insight into bubbling price pressures across parts of the economy. Wages have shown signs of picking up, and supply chain challenges have elongated delivery times and driven materials prices higher.

©2021 Bloomberg L.P.

Consumer Prices in U.S. Increase by Most Since 2009
 

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Comments (4)
Kochar Bipin
Kochar Bipin May 12, 2021 14:49
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The US Government and governments across the world have engaged in massive deficit spending to minimize the impact of the pandemic. At this juncture, inflation is a major boon to cut the real government debt and boost nominal income without levying additional taxes which can hurt the recovery.
Billu Amjad
Billu Amjad May 12, 2021 14:39
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Good
VioLaTor Spawn
VioLaTor Spawn May 12, 2021 14:18
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It's only 'transitory' ... checkout shadow stats for real CPI data
Tom Fearon
Tom Fearon May 12, 2021 13:52
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OmFG
 
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