U.S. inflation stayed at 3.8% in April as gas and grocery costs lingered
April CPI and PCE both ran at 3.8% year over year, while gas prices and softer confidence kept pressure on U.S. household budgets in May.
U.S. households are still seeing prices rise faster than the Federal Reserve’s 2% target. The Labor Department said the Consumer Price Index rose 3.8% from a year earlier in April, and the Bureau of Economic Analysis said its personal consumption expenditures price index also increased 3.8% over the same period. The two measures are different, but they point in the same direction: everyday costs are still climbing.
The pressure is showing up in ordinary bills. BLS said food at home was up 2.9% over the year, electricity was up 6.1%, gasoline was up 28.4%, and shelter costs continued to rise. That mix can be hard to dodge because it hits grocery runs, utility bills, commuting costs and rent all at once.
BEA said consumer spending still rose in April, but real PCE increased just 0.1% after inflation. That means households were still buying, but their purchasing power was not stretching very far.
Fuel is still part of the summer budget squeeze. The Energy Information Administration reported a national regular gasoline average of $4.475 a gallon on May 25, keeping transportation costs elevated for commuters, delivery workers and road trips.
Consumers are still cutting back
The Conference Board said its consumer confidence index slipped to 93.1 in May from a revised 93.8 in April. In the same survey, two-thirds of consumers said they were cutting back overall because of rising prices, mostly by buying fewer items or delaying big purchases. That is survey sentiment, not proof that every household changed its spending, but it does show how inflation is shaping consumer behavior.
What to watch next
The next inflation readings will show whether price pressure is easing or staying sticky. If prices cool, households could finally get some room in their budgets. If not, gas, groceries and power bills are likely to keep doing the squeezing.
