CPI - April 2026
Energy prices push headline y/y CPI to the highest since 2023, core the hottest monthly read since Jan 2025. Fed rate cut expectations rose as real earnings fall y/y for 1st time since 2023.
US CPI (M/M) Apr: +0.6% (est +0.6%; prev +0.9%)
CPI (Y/Y): +3.8% (est +3.7%; prev +3.3%)
Core CPI (M/M): +0.4% (est +0.3%; prev +0.2%)
Core CPI (Y/Y): +2.8% (est +2.7%; prev +2.6%)
US CPI Supercore (M/M) Apr: +0.454% (prev +0.179%)
CPI Supercore (Y/Y): +3.379% (prev +3.142%)
Executive Summary
US April headline CPI decelerated to +0.6% (+0.64% to two decimals) from March’s +0.87% surge, but the y/y rate climbed further to +3.8% (+3.78%), the highest since May 2023, as energy costs (+3.8%) continue to exert pressure (40% of the increase).
It wasn’t just an energy story though with groceries the largest monthly jump in four years along with large jumps in airfares, hotel prices, electronics, and some personal services.
Excluding food and energy core CPI was +0.4% (+0.38% unrounded), the hottest m/m read since January 2025 and above the +0.3% expected, with core y/y rising to +2.8% the highest since September (+2.74% vs. March’s +2.60%). A caveat on core is that a significant portion of April’s acceleration reflects a one-time statistical unwinding of a previous distortion (since October) in rent/shelter.
Core Goods continued to remain very tame suggesting limited tariff pressures, essentially flat (+0.03%).
Core Services though, a metric the Fed is focused on as it represents 60% of CPI and is believed to be a good measure of “underlying” inflation, accelerated to +0.5% (+0.50%), the most since May 2024, driven primarily by the shelter catch-up noted above which surged +0.6% (+0.61%), the largest monthly increase since January 2024.
Supercore (core services ex-housing), which has been an even greater focus of many FOMC members (for the same reasons noted), re-accelerated to +0.45%, the 3rd highest m/m read since January 2025.
Inflation outpaced earnings for a second straight month with real (inflation adjusted) average hourly earnings falling -0.19% m/m (after -0.94% in March the worst two-month stretch since June 2022) and turned negative y/y for the first time since May 2923 at -0.21%.
Fed funds futures markets reacted by pushing up the chance of a rate hike to 58% by next April.
