Energy and Technical Adjustments to Rents Drove Inflation Higher

April CPI rose 0.6% m/m while core CPI reached 0.4%, primarily driven by energy costs and a technical rent adjustment. Markets remained stable as core goods showed fading tariff effects and underlying service inflation appeared manageable.

Key Takeaways

• 1.Total US CPI increased by 0.6% m/m in April, primarily driven by rising energy and gasoline prices.
• 2.Core CPI rose 0.4% m/m, slightly exceeding expectations due to a technical adjustment to rents following a government shutdown.
• 3.Core goods inflation was flat, suggesting that the inflationary impact of tariffs is beginning to fade.

Table of Contents

• Key points
• Energy prices raised total CPI, as expected
• Higher rents main factor behind upside surprise in core CPI
• Faster increases in other services, though partly temporary
• Tariff impact is fading
• Smaller increase in core PCE according to a preliminary estimate
• Indirect effects from higher energy prices will come later

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