U.S. April CPI Up 3.8% Year-on-Year... Driven by Rising Oil Prices

Core CPI Exceeds Expectations
Housing Costs Remain Elevated

The U.S. Consumer Price Index (CPI) for April recorded a 3.8% year-over-year increase, marking the highest rate in three years since May 2023. Soaring gasoline prices led the overall inflation, while persistent underlying inflationary pressures such as housing costs remained evident.

On May 12 (local time), the U.S. Department of Labor announced that the April CPI rose by 3.8% compared to the same month last year. On a monthly basis, it increased by 0.6%. This figure matches the consensus forecast compiled by Dow Jones.

However, the core CPI—which excludes the highly volatile food and energy categories—rose by 2.8% year-over-year and 0.4% month-over-month, surpassing market expectations of 2.7% and 0.3%, respectively. This indicates that underlying inflation is more robust than anticipated, raising concerns that it could partially constrain expectations for a Federal Reserve interest rate cut.

In detail, energy prices climbed 3.8% from the previous month, accounting for more than 40% of the overall CPI increase. Specifically, gasoline prices rose by 5.4% month-over-month and surged 11.1% before seasonal adjustment. The year-over-year increase reached 28.4%. The prolonged war in Iran, longer than expected, is seen as a key factor, with rising international oil prices being reflected in consumer prices.

Housing cost burdens also persisted. The shelter index increased by 0.6% from the previous month. Both rent and owners' equivalent rent each rose by 0.5%. Food prices were up by 0.5% month-over-month, while beef prices jumped 2.7% and fruit and vegetable prices climbed 1.8%.