A worrisome bout of inflation struck the economy in April, with US consumer prices for goods and services surging 0.8%, the largest monthly jump in in more than a decade, and the year-over-year increase reaching its fastest rate since 2008. Over the past 12 months, consumer prices have jumped 4.2%—the fastest rise since a 4.9% gain in the 12 months that ended in September 2008, and more than analysts expected, reports CNN. After years of dormant inflation, with the Federal Reserve struggling to increase it, worries about rising prices have shot to the top of economic concerns. Shortages of goods and parts related to disrupted supply chains have been a key factor, reports the AP. Wednesday's report from the Labor Department showed sharply higher prices for everything from food and clothes to housing.
A 10% surge in the prices of used cars and trucks—a record jump—accounted for roughly one-third of last month's increases. Prices for vehicles, both used and new, have been soaring as a result of a computer chip shortage that has slowed auto production and reduced dealer supplies. Wednesday's inflation report showed that food prices rose 0.4%, the biggest such increase since a 0.5% rise last June. Energy costs, though, edged down 0.1%, with gasoline pump prices falling 1.4%, the biggest drop since May 2020. CNBC points out one contributing factor beyond rising prices: "base effects, meaning inflation was very low at this time in 2020" due to pandemic-related shutdowns. "Year-over-year comparisons are going to be distorted for a few months because of the pandemic’s impact," it observes. The Fed expects we'll settle into its desired 2% range later this year.
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