US Inflation Down 3.5% March to 3.4% April

The US Bureau of Labor Statistics has reported today the US consumer price index inflation has fallen to 3.4% pa (April 2024) from 3.5% pa (March 2024).

On a monthly basis, inflation was up 0.3% for the month (down from 0.4% in March).  0.3% monthly still equates to 3.6% pa if the monthly trend continues.

The Labor department highlighted that housing costs and fuel prices have continued to push prices up (70% of the total increase) but food prices, utilities(water/energy) and car/van/truck vehicle prices fell back.

Comment

The Federal Reserve maintained interest rates at a range 5.25% to 5.5% pa 2 weeks ago and we suspect that this minor annual fall of 0.1% pa is not enough to encourage an interest rate cut at the Fed’s next meeting and then policy announcement at 2pm (EST) on 12 June 2024.

We do expect the U to cut rates before the UK and Europe and no doubt stock markets will react positively today to the news of a slight fall.  When rates do fall, we suspect Summer in the US and Autumn in the UK, stock markets may hit further records and the bond/gilt market will bounce back.  ‘Fingers crossed’.

See Labor Bureau release https://www.bls.gov/news.release/cpi.nr0.htm