It’s perhaps the biggest question swirling around the U.S. economy right now: Is inflation stuck at an elevated level — or will last year’s steady decline resume sometime soon?
On Wednesday, the government will issue the latest monthly inflation report, a set of figures that will be scrutinized by economists, Wall Street traders and Federal Reserve officials for any insight into that question. Analysts estimate that year-over-year inflation dipped from 3.5% in March to 3.4% in April, according to a survey by data provider FactSet. Measured from March to April, consumer prices are expected to have risen 0.4%, the same as the previous month.
Core inflation, which excludes volatile food and energy costs, may show that some relief is in sight: It is forecast to slow to 3.6%, which would be the lowest level in three years, from 3.8% in March. Month over month, core prices are believed to have risen 0.3%, down from the previous 0.4%. The Fed closely tracks core prices, which tend to provide a better read of where inflation is headed.
Whether inflation continues its decline will likely have a significant effect on this year’s presidential race. Republican critics of President Joe Biden have sought to pin the blame for high prices on the president and to use it to try to derail his re-election bid. While hiring remains robust and wage growth, on average, healthy, prices remain generally well above where they stood before the pandemic.
On Tuesday, Fed Chair Jerome Powell reiterated that he expects inflation to ultimately reach the central bank’s 2% target.
But in remarks during a panel discussion in Amsterdam, Powell acknowledged that his confidence in that forecast has weakened after three straight months of elevated price readings. Inflation has fallen sharply from 9.1% in the summer of 2022 but is higher now than in June 2023, when it first touched 3%.
Click this link for the original source of this article.
Author: Faith N
This content is courtesy of, and owned and copyrighted by, https://www.offthepress.com and its author. This content is made available by use of the public RSS feed offered by the host site and is used for educational purposes only. If you are the author or represent the host site and would like this content removed now and in the future, please contact USSANews.com using the email address in the Contact page found in the website menu.