The Consumer Price Index for All Urban Consumer (CPI-U), a closely watched measure of inflation in the United States, has shot up in its April reading, with both the broad CPI for all items and the core CPI excluding food and energy prices up significantly on a year-over-year basis. Compared to April 2020, consumer prices rose 4.2 percent and 3.0 percent excluding food and energy items.
The broad CPI reading was the highest since 2008 and highlights how consumer prices have been affected by the coronavirus pandemic. While prices initially took a dive during the crisis – due to falling out-of-house demand and decreased need for fuel – they are now roaring back, exceeding pre-crisis levels as the United States gets ready to open up again.
The broad CPI stood at 254.2 points in March 2019 and hit 267.1 points in April 2021. The core CPI read 261.8 points the month the pandemic started and most recently reached 274.0 points. Food and energy, which are generally considered more volatile, also behaved accordingly during the pandemic, as shown in the lower dip and steeper consecutive increase in the broad CPI.
Fed interest rates are expected to remain unchanged, however, as crisis-induced fluctuations are anticipated to return to the central bank target range of 2 percent.
This chart shows the year-over-year change of the Consumer Price Index for All Urban Consumers in the U.S.
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