All eyes are on this inflation number, which could have the biggest gain in nearly a decade
12 May 2021 | Economic News
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Consumer inflation data for April is expected to show the biggest year-over-year gain in nearly a decade.
The anticipated 3.6% jump in the headline consumer price index in April would be the largest since Sept. 2011. CPI is expected to be up 0.2% month-over-month, when the data is released Wednesday at 8:30 a.m. ET, according to Dow Jones. That compares to March’s 0.6% increase, or gain of 2.6% year over year.
On a core basis — which excludes food and energy — the CPI is expected to have increased by 0.3% or 2.3% year over year.
For a market already spooked by the specter of inflation, the CPI could take on added importance if it shows a bigger increase than anticipated, particularly in the month over month figures.
“There could be a knee-jerk reaction in the market,” said Mark Zandi, chief economist at Moody’s Analytics. But he said the Fed would take a higher number in stride and the sudden rise should be transitory.
“The things I would look at are rent growth and healthcare costs,” he said. “I would expect rent growth starts to pick up. Health care will likely remain low.”
Zandi added that one area he expects to see a big surge is used cars, with prices increasing 70% from a year earlier.
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