The 0.8% surge in consumer prices in April, the largest monthly increase since 2009, was the latest sign of supply not being able to meet the onslaught of demand as the economy reopens. Goods and services prices both charged higher, leading the CPI to increase 4.2% over the past year. Today’s report sets up some tough base comparisons for this time next year. We suspect that even as inflation has transpired earlier and to a greater degree than expected, the FOMC will still want to see how the dust settles before reacting to inflation given the unique confluence of events and current state of the labor market.
Prices Surge in AprilOf all the shortages being discussed right now, signs of inflationary pressures are not one of them. Commodity prices have continued to tear higher and more manufacturers and services firms report input costs rising than at any time since at least 2008. Businesses are increasingly passing those costs on, as indicated by April NFIB’s survey showing the largest share of firms raising prices since 1981. READ FULL ARTICLE >>