Wednesday’s report indicates that inflation may be becoming more entrenched. Excluding the volatile food and energy categories, so-called core prices jumped twice as much from March to April as they did the previous month. The increases were fueled by spiking prices for airline tickets, hotel rooms and new cars. Apartment rental costs also kept rising.
To make the point of no relief in sight, average prices for a gallon of gas fell to as low as $4.10 in April, according to AAA, after spiking to $4.32 in March. But since then, gas prices have surged to a record $4.40 a gallon.
The escalation of consumer inflation has forced many Americans, particularly people with lower or fixed incomes, to reduce their spending on things like driving and grocery shopping. Among them is Patty Blackmon, who said she's been driving to fewer of her grandchildren's sports events since gas spiked to $5.89 in Las Vegas, where she lives.
To save money, Blackmon, 68, also hasn't visited her hairdresser in 18 months. And she's reconsidering her plan to drive this summer to visit relatives in Arkansas.
She was shocked recently, she said, to see a half-gallon of organic milk reach $6.
“Holy cow!” she thought. “How do parents give their kids milk?”
Blackmon has cut back on meat, and “a steak is almost out of the question," she said. Instead, she is eating more salads and canned soups.
David Irby, 57, of Halifax, Virginia, said he is also cutting back on food and other expenses. A veteran who retired on disability in 2015 as a police officer, Irby said he has switched to chicken from beef, quit buying bacon and doesn’t buy junk food like his favorite treat, Cheetos.
Irby's biggest worry is replacing his 22-year-old Ford truck, which isn’t reliable on long trips. A new one costs $50,00 while a five-year old used version is about $40,000.
“I don’t know how people on a fixed income can buy a vehicle now,” he said. “It takes me almost two years to make $40,000.”
Wednesday's figures will keep the Fed on track to implement what may become its fastest series of interest rate increases in 33 years, economists said. Last week, the Fed raised its benchmark short-term rate by a half-point, its steepest increase in two decades. And Powell signaled that more such sharp rate hikes are coming.