WASHINGTON – U.S. consumer prices jumped .8% in April, the fastest increase in inflation in more than a decade, the Labor Department reported Wednesday, as the world’s largest economy recovers from the ravages of the coronavirus pandemic.
Over the past year, prices are up 4.2%, the fastest increase since the 12 months ending September 2008. The March year-over-year increase was 2.6%.
Some U.S. economists say they are worried about the effect of inflationary pressures on the U.S. economy, with consumers paying more for food, clothes and new and used vehicles.
But Federal Reserve chair Jerome Powell said after a recent meeting of policy makers that long range he is not concerned about inflation. The central bank has held its benchmark interest rate at near zero and says it will continue to support the economic recovery.
“The economy is beginning to move ahead with real momentum,” the Fed chair said, which is likely to push up prices, as the government confirmed with the April report. But employers added only 266,000 new jobs last month, a disappointing figure.
Powell said, “an episode of one-time price increases as the economy re-opens is not the same thing as, and is not likely to lead to, persistently higher year-over-year inflation.”
Excluding volatile food and energy prices, core inflation jumped 0.9% in April, the government said. Core prices are up a sharp 3% over the past 12 months.
With concerns about rising inflation, U.S. stocks dropped sharply Tuesday with the key Dow Jones Industrial Average falling by 1.4%, its worst day since Feb. 26. Stock prices were falling again in early trading Wednesday.