April Price Statistics
While the April price report was a bit more favorable, retail price data on balance continues to suggest that the inflation trend is a bit north of 2 percent. The Consumer Price Index remained elevated in April, rising at a 5.1 percent annualized rate. The CPI excluding food and energy rose a more modest 2.1 percent, a bit above its 3- and 6-month trends but below its 12-month trend of 2.3 percent. The alternative core measures revealed that monthly growth in retail prices decelerated from longer-term trends. The median CPI, which had risen 3 percent or more in five of the past six months, rose a more moderate 2.1 percent, while the 16 percent trimmed-mean rose 2.5 percent.
|Percent change, last:|
|1 mo.a||3 mo.a||6 mo.a||12 mo.||5 yr.a||2006 avg.|
|Consumer Price Index|
|Less food and energy||2.1||1.9||2.0||2.3||2.0||2.6|
|16% trimmed meanb||2.5||3.1||2.8||2.8||2.3||2.7|
|Producer Price Index|
|Less food and energy||0.0||1.5||3.2||1.5||1.4||2.1|
b. Calculated by the Federal Reserve Bank of Cleveland.
Sources: U.S. Department of Labor, Bureau of Labor Statistics; and Federal Reserve Bank of Cleveland.
Longer-term trends in the retail price measures generally indicate that the inflation rate lies between 2 1/4 and 2 3/4 percent. The CPI component monthly price-change distribution reveals that in fact, almost one-third of the index is rising at rates similar to the overall inflation trend, while an additional one-third of the index rose at rates exceeding three percent. This is an improvement from the average monthly inflation rates over the past 12 months, when nearly two-thirds of the index's components rose at rates exceeding 3 percent.
Meanwhile, year-ahead inflation expectations continue to rise, reaching their highest level since last summer, revealing that households expect a 4.3 percent rise in retail prices over the next year. Longer-term inflation expectations among households, which are correlated with movements in core inflation, reached 3.7 percent, a bit above the 3 percent - 3 1/2 percent range in which they've generally fluctuated for nearly decade.