US inflation beat forecasts in April but remained high at 4.9%
The price of goods and services in the US remained stubbornly high in April, rising 4.9.% from a year ago, the labor department reported on Wednesday,
The annual rate of inflation has fallen sharply since hitting a 40-year high of 9.1% last June but prices are still rising at a rate that is more than twice the Federal Reserve’s target rate of 2% a year. April’s rise nearly matched the 5% rise recorded in March.
The latest consumer price index (CPI) – a widely followed measure of the costs for goods and services in the US economy – showed prices rising 0.4% over the month, up from a 0.1% increase in March.
The Fed has been aggressively raising rates as its seeks to tamp down price rises. Last week it announced its 10th increase in rates since March 2022. The Fed chair, Jerome Powell, indicated that the central bank may pause rate rises as it assesses the impact of those increases. But he has made clear that rates are likely to remain high as long as inflation remains elevated.
On Tuesday the New York Fed president, John Williams, warned that he expects inflation to remain an issue for some time despite the central bank’s actions.
“Because of the lag between policy actions and their effects, it will take time for the [Fed’s] actions to restore balance to the economy and return inflation to our 2% target,” he told the Economic Club of New York.