Global Outlook

April’s inflation data in the U.S. presents a mixed picture: rising prices alongside a consumer that, for now, is holding firm.

U.S. inflation reaches highs while retail holds steady

U.S. inflation accelerated to 3.8% year-over-year in April, its highest level since May 2023. While the energy sector drove much of the increase, core inflation also rose to 2.8%, remaining above the Federal Reserve’s target.

Despite this environment and a slight decline in real wages, consumer spending remains notably resilient. The retail sector added 22,000 jobs during the month, reflecting strong business confidence amid sustained demand.

Persistent inflation complicates the Federal Reserve’s outlook. However, labor market resilience and continued hiring in retail suggest that consumption is, for now, cushioning the impact of higher fuel costs and geopolitical tensions.

Core prices posted their fastest monthly pace since January 2025, complicating the Fed’s path to rate cuts. Still, retail hiring and consumer resilience offer a signal of strength in the real economy.

Source: Bureau of Labor Statistics