The annual inflation rate is at a four-year low
May 13, 2025
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Inflation edges up slightly in April: The Consumer Price Index rose 0.2% after a decline in March, with shelter and energy prices driving the increase.
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Overall food prices declined 0.1%, with grocery costs falling but restaurant prices continuing to rise.
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The CPI rose 2.3% year-over-year, the smallest annual gain since February 2021.
Inflation showed modest movement in April as consumer prices increased slightly following a rare monthly dip, according to the latest data from the U.S. Bureau of Labor Statistics. The Consumer Price Index for All Urban Consumers rose 0.2% in April on a seasonally adjusted basis, reversing a 0.1% decline in March.
Economists expected to see a higher rate of inflation in April because of tariffs. But over the past 12 months, inflation rose 2.3%, marking the slowest annual increase in more than four years.
Housing costs continued to be a major source of inflation, with the shelter index climbing 0.3% in April. This single component accounted for more than half of the months overall CPI increase. Rising costs in electricity and natural gasup 0.8% and 3.7%, respectivelyalso contributed, although gasoline prices dipped 0.1% on a seasonally adjusted basis.
While energy prices rose 0.7% in April, the energy index remains down 3.7% compared to the same time last year. Gasoline prices have fallen 11.8% year-over-year, while natural gas has spiked 15.7%.
Grocery prices fall while restaurant prices rise
Food prices presented a mixed picture. Overall, the food index declined 0.1% in April, its first drop in months. Grocery store prices fell 0.4%, led by a steep 12.7% decline in egg prices and a broader 1.6% drop in the meats, poultry, fish, and eggs category.
At the same time, prices for food consumed away from home increased 0.4%, with full-service meal costs rising 0.6%. Over the past year, dining out has become 3.9% more expensive, while grocery prices have climbed a more modest 2.0%.
Excluding volatile food and energy prices, the core CPI rose 0.2% in April, following a 0.1% rise in March. Among the categories showing increases were household furnishings, medical care (up 0.5%), and car insurance (up 0.6%). However, airfares declined by 2.8%, and used car prices dropped 0.5%.
Over the past 12 months, core inflation increased 2.8%. Medical care, education, and motor vehicle insurance all posted annual gains above the headline rate, with motor vehicle insurance jumping 6.4% year-over-year.
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