On Tuesday, attention turns to the updated inflation figures in the United States, set against the backdrop of the ongoing conflict in Iran, which is putting upward pressure on global fuel and food costs.
According to a Bloomberg survey, economists predict that the Consumer Price Index (CPI) will have increased by 3.7% in April compared to the same month last year, and by 0.6% from March. Notably, March registered the highest monthly gain since 2022.
The anticipated rise in consumer prices for April is believed to be largely driven by escalating energy costs. As of Monday, average fuel prices stood at $4.52 per gallon, reflecting a significant increase of approximately 44% compared to the previous year.
The surge in fuel prices is also likely to impact travel expenses. Data from Kayak shows that average domestic airfares increased to $365 during the week of April 27, up from $346 right after the onset of the war. Meanwhile, international airfares have seen even sharper increases, jumping from $805 in early March to about $1,100 in the latest data.
These rising energy costs are expected to eventually influence food prices in the US, particularly as diesel prices continue to rise. However, the full impact on grocery prices may take some time to manifest.
When excluding the more volatile categories of energy and food, economists predict a core inflation rate increase of 2.7% compared to a year ago. This figure represents a slight increase from March’s annual core inflation of 2.6%, but remains closer to the Federal Reserve’s target of 2%. However, it is worth noting that shelter costs are anticipated to rise in April’s report due to data irregularities stemming from last year’s government shutdown.
As the situation unfolds, analysts and consumers alike will be closely monitoring the impact of these economic indicators.
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