The Consumer Price Index for All Urban Consumers (CPI-U) increased by 0.4% on a seasonally unadjusted basis in April 2023, according to the Bureau of Labor Statistics report published May 10. Year-over-year, before seasonal adjustment the all-items index grew by 4.9%, which is slightly down from 5.0% in March.
Overall, the April 2023 CPI report came in better than expected for market watchers. Independent observers generally expected a steady inflation rate of 5.0% for April, so the slightly better-than-expected results of 4.9% generated a jump of 150 points in the Dow Jones.
This month’s CPI report indicates that the Federal Reserve’s hawkish monetary policy is working as intended, as inflation has been continually trending downward for the better part of a year. However, there remains a long road ahead to get to the 2.0% target rate that the Fed has maintained as a policy aspiration.
Source: Bureau of Labor Statistics
April’s monthly CPI figure (0.4) came in significantly higher than the previous month’s (0.1). This is due to the fact that March 2022 saw significant increases in oil, gas, and natural resource prices during the early days of the Russian invasion of Ukraine, creating a skewed base-year effect.
Overall, heightened consumer costs for shelter, used cars and trucks, and gasoline were the main drivers behind April’s 2023 CPI increase.
Food Prices
The food index went unchanged in April, while the food at home index fell (-0.2%), which is a deceleration from the previous month’s drop of (-0.3%). Fortunately for American families, four out of six grocery indices fell in April, providing some relief at the supermarket checkout. Notably, fruits and vegetables fell (-0.5%), and meats, poultry, fish, and eggs fell as well (-0.3%).
By contrast, certain food items increased in price. Most notable were cereals and bakery goods, which increased (+0.2%) in April, although they rose by an even higher margin during the previous month (+0.4%).
Energy Prices
Energy costs rose in April (+0.6%) after falling (-3.5%) in March. Gasoline, in particular, rose by +3.0% whereas the natural gas index declined (-12.2%) on the year. At the same time, the fuel oil index also dropped off precipitously (-20.2%) while electricity costs rose by +8.4%. In other words, energy costs either rose or fell by varying margins depending on the segment of the market and the specific energy type.
Core April 2023 CPI
The core CPI data for April 2023, which refers to the monthly CPI figure less food and energy, rose 0.4% month-over-month in April, matching its pace in March. Below, we’ve shared a brief breakdown of the main price movements seen within April’s core CPI reading:
- Shelter index: +0.4% (+0.6% in March)
- Used cars and trucks: +4.4%
- Motor vehicle insurance: +1.4%
- Airline fares index: (-2.6%)
- New vehicles: (-0.2%)
- Medical care index: (-0.3%)
- Shelter index: +8.1% (comprising 60% of the core CPI’s total increase)
Source: Bureau of Labor Statistics
Seasonally Unadjusted CPI Data for April 2023
Prior to seasonal adjustment, the CPI-U data for the month increased (+0.5%), rising to an index level of 303.363. Due to their unadjusted nature, these data include normal price fluctuations that regularly occur at the same time and by the same margins every year.
Protect Your Portfolio from Inflation in 2023
Every month, the U.S. dollar loses value, and the relative purchasing power of the American consumer declines. To combat the negative effects of inflation, consider speaking to your financial advisor about diversifying your investment portfolio with alternative assets that may help insulate your savings from the devaluation effects of inflation.
Hard assets such as gold and silver have historically performed well during periods of economic uncertainty and high inflation. As an inflation hedge, its often sought after by investors looking to actively manage risk in their investment strategy. To get started with gold or silver investing, consider opening an account with one of America’s best gold IRA service providers. The current top-ranked provider of gold IRAs is Noble Gold—you can read an exclusive review of Noble Gold here.
To keep tabs on inflation in the months ahead, don’t forget to use our exclusive CPI inflation calculator tool to see how macroeconomic conditions are affecting your purchasing power.
Liam Hunt, M.A., is a writer specializing in finance and international affairs. His articles have appeared in the Toronto Star, Ottawa Citizen, and Vancouver Sun, and his expert commentary has been featured in Forbes, Bloomerg, Barron's, and the New York Post.
