Inflation appears to be cooling, but Americans remain skeptical
New York (CNN) — Inflation seems to be on the decline after showing signs of sticking earlier this year, with big-box retailers lowering prices on thousands of items. However, Americans are still uncertain about the sustainability of this trend.
Recent economic data indicates a slowdown in inflation, with the latest Consumer Price Index report showing a 3.4% increase for the 12 months ending in April. Core CPI, excluding food and energy, also dropped to 3.6%, the lowest rate since April 2021.
Despite these numbers, Americans are not convinced that inflation will continue to ease. The Conference Board’s Consumer Confidence Index showed a rise in average 12-month inflation projections to 5.4%, with 56.2% of consumers expecting higher interest rates in the coming year.
While the economy appears strong on paper, with record-high stock prices and low unemployment rates, the reality for everyday Americans is different. Home prices hit a record high in March, making it difficult for prospective buyers. Grocery and menu prices remain high, and even high-income consumers are beginning to cut back.
Inflation concerns are also growing among investors, with 19% citing it as a primary concern in a recent survey. The Federal Reserve continues to monitor inflation closely, with the next update on the Personal Consumption Expenditures index expected soon.
Senate Democrats, led by Chuck Schumer, are calling for a Justice Department investigation into Big Oil for alleged collusion and price fixing. This comes after accusations of industry manipulation to inflate oil and gasoline prices.
Overall, while inflation may be showing signs of cooling, Americans remain cautious about the future economic landscape. The uncertainty surrounding inflation and the affordability crisis continue to weigh on consumer confidence and investment decisions.