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Key inflation gauge worsens, eroding Americans’ income and spending power

Key inflation gauge worsens, eroding Americans’ income and spending power

Summary

Inflation in the U.S. rose to 3.8% in April, the highest level in nearly a year, driven by increasing gas and food prices. This rise means Americans’ incomes are not keeping up with price increases, reducing their spending power.

Key Facts

  • Inflation increased to 3.8% in April compared to a year ago, up from 3.5% in March.
  • This is the highest inflation rate since May 2023.
  • Prices rose 0.4% from March to April, slower than the 0.7% rise the previous month.
  • Gas prices and food costs are major factors pushing prices higher.
  • Core inflation, which excludes food and energy, increased to 3.3% in April.
  • Core prices grew 0.2% from March to April, showing slower monthly growth.
  • Americans’ incomes stayed the same from March to April, but after adjusting for inflation, they fell by 0.1%.
  • Higher inflation may affect decisions by the Federal Reserve and political challenges for congressional Republicans in the upcoming midterm elections.
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