Consumer prices are expected to jump sharply in April data that will be released on Wednesday, a move resulting mainly from a technical quirk — but one that investors will be watching carefully as they try to determine if inflation could alter Federal Reserve policy.
The Consumer Price Index probably climbed by 3.6 percent in the year through April, economists surveyed by Bloomberg expect. The increase in prices from March to April is expected to be more muted, at 0.2 percent. The Labor Department will release the figures at 8:30 a.m.
The annual jump would be the fastest increase since 2011, and a sign that prices are shooting higher as inflation figures lap extremely weak readings from 2020 and, to a lesser extent, as supply chain disruptions begin to bite and demand climbs.
Central bankers think the jump in prices will be short-lived, and have made it clear that they plan to look past a temporary increase when setting policy. The technical quirks at work in April will last only a few months, officials point out, and while it is less clear when shortages will be resolved, they are expected to eventually work their way through the system as businesses ramp up production to meet demand.
uncomfortably low levels, where they have been mired for much of the past decade.
said during a speech on Tuesday that “remaining patient through the transitory surge associated with reopening will help ensure” the economic momentum to “reach our goals.”