U.S. CPI increases to 3.8% in April

追加: 2026-05-17

[00:00:00]All right, we are just getting the latest inflation numbers from south of the border. Quick look here. CPI month-over-month.6% same as the the survey. Core CPI month-over-month.4% survey was.3 and here's the big one year-over-year 3.8% the survey was 3.7 and core CPI 2.8% year-over-year and 2.7 was what we were expecting for a little more reaction and in-depth analysis we turn to Ian White chief economist at Huntington Commercial Bank. Ian, thanks very much for joining us this morning.

[00:00:33]Thank you for having me. I appreciate it. Okay, 3.8 you were you guys were expecting 3.6. What do we know what's driving this the even bigger number?

[00:00:43]Um one of the things we've been watching for a while is services.

[00:00:46]Um last year a lot of the conversation was about tariffs in terms of inflation but in the reality when you looked at what drove inflation last year it was lower end labor costs. Um so we we had that was up.6% month-over-month. We also had a decent jump in food as well.5. You know, that's going to be kind of an obvious pass-through though from oil energy costs and oil costs directly to food. It's pretty heavy diesel using industry. So some of that was expected but yeah, a little hotter than we were than we were estimating. Um there was some weird effects though in terms of shelter as well that's worth mentioning. What was it what were some of those?

[00:01:24]Sure. Um so in shelter what what happened basically was because the government shut down back in October there was some statistical anomalies and BLS had to basically change the way it calculated shelter for the next few months they will and so what they did was they basically had two months of shelter inflation in what packed into one month here. So it should be going forward that should be corrected and actually shelter was something we were pretty positive about lower shelter much like north of the border south of the border as well. You know, we have fairly weak shelter inflation happening especially if you look at the market rent indices which tend to move before BLS's indices. You know, CoStar's at basically 0.0% year-on-year inflation.

[00:02:07]>> [snorts] >> And just thinking about sort of forecasting inflation, obviously economists have lots of time and elaborate models to throw the thousand prices in the blender and build their forecast bottom up. But if you're you know, a do-it-yourself investor or or looking for a shortcut um you know, are there things that you can point to and for context, we had a summer intern we brought in last year and we wound him up on a project to look at market implied inflation as measured by the TIPS Treasury Inflation Protected Securities market and also the University of Michigan 5-year inflation forecast from that survey and you know, his work found that actually both [snorts] of those have some predictive power but at different times. So, any thoughts on what those surveys or signals are telling you cuz they're pretty divergent with the University of Michigan reading much higher in the bond market much lower.

[00:03:00]Yeah, I mean I always think gasoline is such a of thing on the front of people's minds and yet in terms of the overall spending basket for the US for almost every quintile of households up until the top quintile, it's roughly 4% of spending last year. We see it going up to 5 to 6% this year.

[00:03:18]So, people talk a lot about gasoline and I think that really drives when you ask in a survey, you know, what am I thinking about inflation? The reality is something that's much bigger is you know, overall services inflation, wage cost there, health care inflation that really drives into PCE, less much less in CPI. That's actually one of the big differences between the Feds cuz all that indirect health care spending that we get from our insurance companies doesn't count in CPI. And the other thing in CPI of course is shelter and for a while we've had really robust shelter inflation.

[00:03:46]That's come down a lot. That's helped a lot. And for a lot of rental households, I mean mean, talking a third of their income whereas you know, we're we're focused on gas prices, which are 4 or 5% of their income.

[00:03:57]And that and that's making the difference. Now, so would would this make any difference? I mean, we've heard Trump musing about maybe dropping the federal tax, one of the federal taxes on gas. Would that help at all then really or is it a drop in the bucket so to speak?

[00:04:11]I mean, it's it's it wouldn't hurt.

[00:04:13]Um certainly, you know, we've seen stimulus effects this year this um past few months that probably have helped offset some of the pain at the pump for consumers because there were a couple weird things from the tax bill last year where a lot of the effects didn't actually hit till this year because withholdings didn't change. And so therefore, you know, people got a little bit bigger paycheck starting in January and they got bigger refunds because they had higher withholdings last year. You put that together, it's typical household, you're talking 1 to 2% of their income, very actually similar to the hit from gas prices. So, that stimulus effect has helped. So, we we've definitely had some stimulus that have helped that's helped offset um the effects of higher gasoline prices on households. And that's part of why, you know, when we look at the consumer data, if, you know, you can on your terminal, you can look at Bloomberg's second measure.

[00:05:04]Um we have some other real-time spending metrics we can look at using credit card data that's not public. And when when you put that all together, you see a consumer that's still spending at a fairly similar clip for non-gasoline products, including sensitive areas like restaurants, airlines um that tend to be sensitive if when consumers pull back.

[00:05:21]Uh so, we're still seeing a consumer spending. We still see a fairly resilient consumer. Um you know, it probably wouldn't wouldn't hurt lowering the gas tax in terms of that stimulus, but at the same time on the rate side, you know, that that also can push up rates.

[00:05:35]Ian, how do you read the interplay between labor markets and and inflation?

[00:05:41]And just thinking about this word transitory that um uh you know, has probably been the Achilles' of the Federal Reserve after experimenting with it uh post COVID. Um, but you know, then we had very tight labor markets and and then we got the supply shock of the Russia-Ukraine war and the oil price spike. And so, you got the wage-price spiral. Labor markets seem to be somewhat looser now. So, how are you thinking about this oil shock and how it feeds through into the dreaded wage-price spiral in today's environment? Yeah, that was a good point. I I love that point Powell made and you kind of made the same point here that, you know, we we have all these transitory shocks and we've had essentially four distinct shocks when you count, you know, COVID, the the Russia war, um, tariffs. All these things have have been inflationary shocks and now we have another one um in the last, you know, 6 years or so.

[00:06:32]And at some point, like, does is is a transitory shock a normal reality we're living with? Um, maybe. It's it's certainly become more common and I think the bond market has priced that in a bit. On the labor force side, I'd say we kind of see a two two-speed labor market. If I talk to companies that are competing for hourly workers, um, lower-end wages, they still see a fairly tight market. It's it's not as crazy as it was uh a couple years ago, but they still see a fairly tight market at the lower end of the labor market if you're, you know, fast food, warehouse workers, that kind of thing. I mean, part of it is you have, say, the big warehouse companies, you know, an Amazon is paying, I think, an average of $23 an hour and that's a very large employer in a lot of areas. It's really pushing up hourly wages. We're seeing a tight market. But if you if you talk to, you know, parents or or new college parents of or new college grads themselves, they'll say it's it's a tough market for the college grads, new college grads.

[00:07:28]Um, and it kind of fits which industries are hiring. The industries that's going to hire a lot of college grads are the ones that aren't hiring in significant ways.

[00:07:35]More lower-end, including actually health care is a shockingly low-end industry. The percentage jobs that really are, you know, clea- bedpans, um, providing food services is a pretty large percent of the healthcare market. And so, you see that's a big part of actually where the job growth has been in things like home health aids. So, that market we still see as as relatively tight, not the same turnover as it was and that's creating challenges and I think that's part of why we're seeing, you know, you look at food away from home, still up 3.2% year-on-year. You have services up 3.4% year-on-year. These really reflect partly, you know, wage pressures in that space. All right, we have to wrap it up there, Ian, but thanks as always for joining us.

[00:08:17]Appreciate it.

[00:08:19]Thank you for having me. Really appreciate it, Roger Brian. Ian Wylie, chief economist at Huntington Commercial Bank.