US inflation rate slows but remains close to 40-year high
Price rises slowed in the US in April but the annual inflation rate remained close to a 40-year high, leaving many Americans struggling to afford necessities including food, shelter and fuel.
The latest consumer price index (CPI) figures – which measure a broad range of goods and services – showed prices rising by a monthly rate of 0.3% in April, down from 1.2% in March, the first fall since August 2021.
But it is still too early to say whether inflation has peaked. At 8.3% the annual rate of inflation in April was down from 8.5% in March but remains at a level unseen since the 1980s. Over the year the CPI’s food index increased 9.4%, the largest 12-month increase since April 1981.
The figures come as the Federal Reserve is moving to sharply increase interest rates in an attempt to bring prices back under control. The pace of rate rises, and fears that they may trigger a recession, have spooked investors and sentstock markets reeling.
Soaring demand and a lack of supply thanks to the pandemic have led to price rises across a broad swathe of goods and services. A booming house market has made housing unaffordable for many Americans, especially people of color, and 49% of people recently told Pew Research that affordable housing is a large problem in their community.
The rising cost of living has become a leading political issue as the US prepares for November’s midterm elections. Rising prices have battered Joe Biden’s approval ratings. This week an Investors Business Daily/TIPP poll found that Biden’s approval had fallen to 39%, approaching his previous record low of 38% set in February, and confidence in the US economy was close to an eight-year low.
On Tuesday, Joe Biden said his administration was doing all it could to
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