Much to the relief of consumers, especially the Federal Reserve, inflation has fallen for the first time in three years.
Reliable statistics from the Labor Department confirm the downward trend in inflation, as evidenced by the Consumer Price Index (CPI).
Consumer Price Index shows positive signs
The Fed has been keen on getting inflation to 0.2% and making this a steady and achievable rate. As we reported, the government body had Wall Street on high alert, but a strong showing from the trading floor banished any early indicators of a rate hike.
There is a direct correlation to the CPI figures to specific services and industries, such as car insurance and medical care. Clothing prices have surged the most since 2020, showing that consumers may see a freer income to invest in these commodities.
After a Conference Board survey, we reported low consumer confidence in America. Over 36 million Americans took part in the survey, which sparked some serious concerns about the US people’s perception of persistent inflation.
Dana M. Peterson, Chief Economist at The Conference Board, said of the dip, “Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation and more concerned about future business conditions, job availability, and income.”
These same issues are the focus of Federal Reserve Chair Jerome Powell, who has kept his finger hovering above the button regarding rate increases.
“We did not expect this to be a smooth road, but these were higher than I think anybody expected,” Powell said.
The Fed Chairman has been stoic, saying, “we’ll need to be patient and let restrictive policy do its work.” He is waiting until there is no other option than to increase rates if necessary or decrease them as many Americans businesses would eagerly welcome.
Image: Ideogram.
