Higher prices to eat out and travel about may put some pressure on household spending going forward, based on a first look at the latest consumer price numbers.
The good news is that inflation excluding food and fuel—the so-called core inflation rate—ticked lower in April for the second straight month.
The core inflation rate was 2.1% in April while the year-to-date rate is running 2.2%. Overall inflation including food and fuel remains much lower, near 1%, because energy prices remain down from a year ago.
Although overall inflation pressures remain low or modest, the big variation in price pressures among categories continues to give households reason to economize where prices pressures are low (i.e., retail goods) to compensate for areas where pressures are high (i.e., services):
- In food at home, prices remain down year-to-year and year-to-date, although they edged higher in April month-to-month.
- In apparel, prices continue to decline across all measures.
- Prices for services—led by rent, medical care and education—remain the biggest drags on household budgets. Inflation remains above 3% across those categories.
See the table summary for more detail.
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