WASHINGTON — More credit union members are feeling financial pressures as U.S. consumer prices rose sharply in April, pushing inflation to its highest annual rate in nearly three years and adding pressure on the Federal Reserve to keep interest rates elevated, according to data released Tuesday by the Labor Department.
The Consumer Price Index increased 0.6% in April after rising 0.9% in March, while annual inflation climbed 3.8%, the highest level since 2023, according to the Bureau of Labor Statistics.
The increase was driven by broad-based gains in energy, food and services prices amid continued geopolitical tensions tied to the conflict involving Iran, which has disrupted global oil markets and shipping routes.
“Inflation continued to rise in April, driven by higher gas prices. Overall prices are now 1.4 percentage points higher year over year since February, moving further away from the Federal Reserve’s target,” Dawit Kebede, senior economist with America’s Credit Unions, said in a statement. “If this trend continues, price increases could spread to other goods and services, further exacerbating inflation risks, squeezing consumers, and straining affordability. Through these challenges, credit unions will remain a trusted partner to members.”
It’s the Gas, Gas, Gas
Energy prices rose 3.8% during the month, including a 5.4% increase in gasoline prices, while food prices climbed 0.5%, according to the CPI report. Core inflation, which excludes volatile food and energy costs, increased 0.4% in April and 2.8% over the past 12 months.
Chicago Federal Reserve President Austan Goolsbee called the latest inflation reading “disappointing,” particularly because of persistent price increases in the services sector, Reuters reported.
Financial markets reacted swiftly following the report. Reuters reported Treasury yields rose and investors further reduced expectations for any Federal Reserve rate cuts this year.
Economists told Reuters inflation pressures are likely to remain elevated as long as oil prices remain high and supply-chain disruptions continue. Some analysts now expect inflation could move above 4% in coming months if energy costs do not ease.
