Published on Monday, May 24, 2021

U.S. | Interpreting April’s CPI: no reflation for now

The CPI index increased by 4.2 percent (year-over-year) for April, a record-high since 2008. The likelihood of persistently high inflation re-emerged as one of the driving forces in financial markets. We examine the sector-level price data to determine if such a concern is well supported.

Key points

  • Key points:
  • The year-over-year CPI growth can be a biased measure for inflation
  • April's CPI growth is mostly driven by abnormally high prices in used vehicles and transportation services
  • Prices surges in those two sectors are expected to be transitory
  • Therefore, no sign of sustained high inflation for now

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