Core Inflation Unchanged in April

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In April, core inflation remained unchanged. And, overall inflation decreased as increases in energy prices slowed and the food index fell.

On a seasonally adjusted basis, the Consumer Price Index (CPI), released by the Bureau of Labor Statistics (BLS), rose by 0.3% in April, after a 0.4% increase in March. Excluding the volatile food and energy components, the “core” CPI increased by 0.1% in April for the third straight month.

The food index declined by 0.1% in April, after rising 0.3% in March. It was the first decline in the food index since June 2017. Five out of the six major grocery store food group indexes decline, while the index for food away from home rose 0.3% in April. Meanwhile, the price index for a broad set of energy sources rose by 2.9% in April, slower than a 3.5% increase in March. Monthly changes in energy prices and overall inflation moved in the same direction as core inflation remained unchanged in April.

Over the past twelve months, on a not seasonally adjusted basis, the CPI rose by 2.0% in April, faster than a 1.9% increase in March. It was the largest gain since November 2018 on a year-over-year basis. Meanwhile, the “core” CPI increased by 2.1% over the past twelve months, after rising 2.0% in March.

NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster (slower) than overall inflation, the real rent index rises (declines). The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components).

The Real Rent Index rose by 0.3% in April, the same increase as in March. Over the first four months of 2019, the monthly growth rate of the Real Rent Index was 0.2%, on average, higher than the average of 0.1% in 2018.



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