Inflation Trends and the RCF Inflation Scorecard – April 2024

April CPI Better but Still a Ways to Go

Peter Bernstein, Chief Economist, 312-431-1540 x1515

The Current Situation

The CPI increased 0.3% in March, lowering the 12-month inflation rate to 3.4%.  Core prices also increased 0.3%, lowering the 12-month core inflation rate of 3.6%.  Core inflation has been on a steady, but slow decline for more than a year and the most recent annual rate is the lowest since April 2021.  Even so, if the current rate of decline continues, it will not be until 2025 that core inflation dips to 2%.  Producer price inflation was just 2.2% in April, a huge decline from the 11.7% rate in early 2022 but, unfortunately, trending upward since hitting a low of 0.8% in November 2023.

CPI, Core CPI, and PPI inflation

Figure of three measures of inflation, showing that CPI and Core CPI are very close at 3.4% and 3.6%, while PPI is lower, at 2.2%.

While the April numbers aren’t great, they provide some relief after higher-than-expected inflation in the first three months of the year. Rent and owner’s equivalent rent (OER) inflation is declining but inflation excluding shelter prices has been trending up; 2.2% in April versus a low of 0.7% in May 2023. Overall, the data are pointing to gradually lower inflation, but somewhat more widespread upward pressures on price. For now, we’ll take a small victory in April as a hopeful sign.

RCF’s Inflation Scorecard

RCF’s Inflation Scorecard is based on analysis of 20 different price series comprising 98% of the total consumer price index. Each of these price series represents a portion of the CPI based on household spending patterns. For example, food purchased for at-home consumption is about 8.2% of the typical consumer’s budget; it has a weight of 8.17 out of a total index of 100.
Our scorecard presents two metrics to track month-to-month price increases. The first metric is the share of the index for which inflation in the most recent month is rising (greater than the prior month’s inflation) vs. the share of the index for which inflation is falling (lower than the prior month) or prices fell (deflation). Our second metric is the share of the index for which the most recent month’s inflation exceeded 0.2%, a monthly rate that corresponds to the Federal Reserve’s target inflation rate of 2% per year.

RCF Inflation Scorecard: April 2024

Figure with falling, stable, and increasing inflation, showing that in April, a 19% share of goods and services had rising inflation, and 62% had inflation above the Fed's target.

The good news is that 23% of the weighted CPI experience deflation (lower prices) in April vs. March. That’s the best deflationary reading since November 2023, and the second best in over a year. More good news is that only 19% of the weighted CPI showed higher inflation in April than March, the second lowest share of increasing monthly inflation over the past 12 months. A total of 44% of the CPI had the same monthly inflation rate in April as in March.

Our second metric shows that 62% of the weighted CPI components had a monthly inflation rate in April above 0.2%. That’s a small improvement over the 65% reading in March but still shows that most of CPI is seeing price increases above the monthly rate consistent with the Fed’s 2% target. Together, our metrics confirm the trend toward gradually lower, but still too high, inflation.

Analysis of Individual Components of the Consumer Price Index

Table with year-on-year and month-on-month inflation for 20 components of the CPI, making up 98% of the total index.

Sources: Bureau of Labor Statistics and RCF Calculations. Inflation direction indicates whether monthly inflation in April was higher or lower than monthly inflation in March. Deflation means prices fell in April vs March.


  • Food-at-home (a.k.a. grocery) prices fell 0.2% in April and are up just 1.1% vs. a year ago.  Food-away-from-home (a.k.a. restaurant) prices rose 0.3% in April and are up 4.1% vs. a year ago. The higher inflation for restaurant meals likely reflects higher labor costs. 
  • Both new and used vehicle prices fell in April and are lower than they were a year ago.  Unfortunately, along with higher financing rates, car owners have to deal with higher fuel prices (up 2.7% in April) and higher insurance costs (up 1.8% in April and a whopping 22.6% compared to last year).   
  • There is a hint of good news on shelter prices. Rent and owner’s equivalent rent (OER) were both up 0.4% in April, the same monthly increase as in March.  But year-over-year, shelter price inflation is declining.  While rents were still up 5.4% vs. a year ago, that’s the lowest annual rent increase in two years.  The BLS rent inflation measure, which feeds into OER inflation, lags real-time measures such as Zillow’s rent index which shows a 3.6% year-over-year increase.  This suggests that declining shelter inflation will become more pronounced in the coming months.
  • Wages continue to rise faster than inflation.  They were up 4% according to the BLS measure, with a somewhat higher reading (4.7%) coming from the Atlanta Fed.   That’s good news for workers but it also adds to inflationary pressures.  As evidence, goods prices are up just 0.3% over the past year while service sector prices have risen 5.3%.