US core inflation slows for first time in 6 months

The US Consumer Price Index (CPI) increased by 0.3 percent monthly in April, below market expectations. The country's core CPI, which excludes variable energy and food prices, increased by 0.3 percent monthly and 3.6 percent annually in April. Thus, core inflation slowed for the first time in 6 months. The US Department of Labor announced consumer price data for April. Accordingly, consumer prices increased by 0.3 percent in April compared to the previous month. The market expectation was for the CPI to increase by 0.4 percent during this period. The country's CPI increased by 3.4 percent annually in April. Thus, the annual CPI was also in line with the market expectation of 3.4 percent. On the other hand, inflation in the US had been 0.4 percent monthly and 3.5 percent annually in March. The country's core CPI, which excludes variable energy and food prices, increased by 0.3 percent monthly and 3.6 percent annually in April. Thus, core inflation slowed for the first time in 6 months. Meanwhile, the S&P 500 broke its previous closing record after data showed the consumer price index cooled for the first time in six months in April. Retail sales also slowed somewhat compared with the previously hot consumer sector. Taken together, analysts say this supports the Fed cutting interest rates in the fall. Powell calls for ‘patience’ on inflation Fed Chair Jerome Powell stressed the need to keep borrowing costs high for an extended period, saying at an event hosted by the Foreign Bankers Association that inflation should wait for evidence that it is cooling. The Fed chair reiterated his comments earlier this month, saying the latest inflation figures suggest it will take longer than previously thought to achieve the confidence needed to cut interest rates. Referring to the lack of progress in inflation in the first quarter, Powell said: “We didn’t expect it to be a smooth road, but this data was higher than I think everyone expected. What this tells us is that we need to be patient and let the restrictive policy do its job. “It looks like it will take longer before we can be sure that inflation will come down to 2% over time.”