US price inflation fell to 3.4 percent in April-E24

The downward trend in inflation has slowed recently, but fell last month as expected.

Price inflation in the United States ended at 3.4 percent in April, compared to the same month last year. This shows the latest figures for the Consumer Price Index (CPI). US statistical authorities.

That was exactly what analysts had previously expected, according to estimates compiled by Bloomberg. Core inflation, which excludes food and energy goods, also fell as expected to 3.6 percent.

On a monthly basis, from March to April, prices rose by 0.3 percent. It was lower than expected for overall inflation.

Price inflation in the United States peaked at very high levels just under two years ago, after which there was a clear downward trend for a prolonged period. However, this development has shown signs of stopping in recent months.

April is the first time in 2024 that price growth has moderated in the United States, although inflation was lower at the beginning of the year. In March, inflation rose to 3.5 percent, while core inflation remained at 3.8 percent.

CPI numbers are one of two important ways to measure price inflation in the United States. The personal consumption expenditures numbers, the second one, come towards the end of the month.

– Supports lowering interest rates in the fall

There are green numbers in pre-trading US stock markets following the inflation numbers, and US government interest rates are falling. The key 10-year interest rate in the United States stands at 4.36 percent around 3 p.m., compared to 4.41 percent just before the inflation figures are released.

“This is the first good CPI report in four months and the market is impressed,” Gary Pzeggio of CIBC Private Wealth US tells Bloomberg, who believes the numbers overall “support a fall rate cut.”

Richard Flynn of Charles Schwab in the UK says that while today's update on price growth is encouraging, it is unlikely to lead to any immediate changes when it comes to interest rates.

“Patience has been the Fed’s main message lately,” Flynn told Bloomberg.

The central bank “must be patient”

Price growth remains well above the inflation target set by the US central bank, the Federal Reserve. The goal is to achieve stable price growth of 2%, as is the case in Norway.

At the beginning of May, the central bank kept the interest rate unchanged at 5.25-5.50 percent. He has been there since July last year. The Fed then signaled a lack of progress toward its inflation target.

Fed Chairman Jerome Powell reiterated last Tuesday that inflation numbers were higher than expected, and that this meant they “must be patient and let tight monetary policy do the work,” he writes. CNBC.

Waiting for an interest rate cut in the fall

Confidence in US interest rate cuts has fallen like a rock since the new year. It is linked to rising prices, but it is also linked to the fact that economic activity is resilient and the labor market is strong.

Ahead of today's inflation figures, the market is anticipating a roughly 80% chance of a rate cut in September, with the first cut fully priced into November.

For the Norwegian Bank and interest rates here at home, developments in important economies such as the US and the Eurozone are central. The level of the interest rate and expectations of the level of the interest rate in the future affect the exchange rates and the krone, among other things.

The service pulls up

US food prices were unchanged from the previous month in April. In the past 12 months, food prices have risen by 2.2 percent.

On the other hand, energy prices rose by 2.6 percent last year.

Services inflation is one factor being monitored, partly because it can be linked to higher wage growth. Services, excluding energy services, rose by 0.4 percent on a monthly basis and 5.3 percent on a yearly basis.