Recent inflation continues to be closer to 4% than 2%.
Posted on May 17, 2024

The data for April that was issued this week shows inflation is running closer to 4%, not the Fed’s target of 2%. I display a table and the same six graphs that I’ve used to follow the trends in inflation.

 

 

== Three key measures ==

 

The two most widely-reported measures of inflation are Seasonally-adjusted inflation and Core inflation.

 

Seasonally-adjusted inflation increased by 0.31% in April. The rate over the last six months aims at an annual rate of 3.6%.

 

 

Core inflation excludes volatile energy and food components. This is similar to the measure favored by the Federal Reserve. Inflation increased by .29% in April. The last six months aim at an annual rate of 4.0%.

 

 

Personal Consumption Expenditures (PCE) excluding Food and Energy is the measure of inflation that the Federal Reserve Board favors. The graph shows the data ending March; the data for April is issued at the end of this month. Inflation was .32% in March, and the last six aim at an annual rate of 3.0%. The last three aim at 4.4%. 12-monrth inflation is 2.8%.

 

 

== History of 12-month inflation ==

 

Full-year inflation measured by CPI-U the 12-month rate has been 3.4%. The 12-month rate has been less than 4% for 11 months, but has never been lower than 3.1%.

 

 

== Producer’s Price Index ==

 

The change in producer prices will impact consumer inflation. PPI over the last six months is at a 1.6%. annual rate.

 

== Services ==

 

The last six months aim at an annual rate of 5.3%.

 

 

 

Conclusion: Monthly inflation in April was 0.3%. That’s an annual rate of 3.6% inflation. We are running closer to 4% inflation than 2%.