WASHINGTON (NEWSnet/AP) — Consumer inflation in the United States cooled slightly in April, after three months of elevated readings.

Prices rose 0.3% from March to April, the Labor Department said Wednesday, down slightly from 0.4% the previous month. Measured year-over-year, inflation ticked down from 3.5% to 3.4%.

And a measure of underlying inflation, which excludes volatile food and energy costs, also eased in April.

Inflation had been unexpectedly high in the first three months of this year after having steadily dropped in the second half of 2023. The elevated readings had dimmed hopes that the worst bout of inflation in four decades was being rapidly tamed.

Fed Chair Jerome Powell responded by dropping his previous suggestions that interest rate cuts were likely this year. Instead, he stressed that the Fed’s policymakers need “greater confidence” that inflation is falling to their 2% target level before they would reduce borrowing rates from high levels.

On Tuesday, Powell reiterated that he still expects inflation to ultimately reach the central bank’s 2% target. But in remarks during a panel discussion in Amsterdam, Powell acknowledged that his confidence in that forecast has weakened after three straight months of elevated price readings.

Economists are divided over whether the high inflation figures in recent months reflect a re-acceleration in price growth or are merely echoes of pandemic-related price distortions. For example:

  • While auto insurance has soared 22% from a year ago, for example, that surge may reflect factors specific to the auto industry: New car prices jumped during the pandemic, and insurance companies are now seeking to offset the higher repair and replacement costs by raising premiums.
  • Stubbornly elevated apartment rents are another key factor behind persistent inflation. Rents soared during the pandemic as more Americans chose to live alone or sought more living space. Though rents for new leases are rising much more slowly, consistent with pre-pandemic patterns, the earlier increases are still elevating the government’s price data.

Some economists also point to steady consumer spending on restaurant meals, travel and entertainment, categories where in some cases price increases have been elevated, likely reflecting strong demand.

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