The prices of food purchased by American households were up by 10 percent in April, the biggest jump in since 1981.
The personal consumption expenditure price index for food consumed off-premises rose one percent compared with the prior month, a report released Friday by the Bureau of Economic Analysis showed.
The prices of fuel and related services were up 30 percent compared with April of last year. Compared with March, however, energy prices actually declined in April. In May, however, they have likely climbed again. The average price of gasoline hit a new record high of $4.60 a gallon on Thursday.
The rate of inflation as measured by the personal consumption expenditure price index over the past year slowed to 6.3 percent in April from a 40-year high of 6.6 percent in March. This was the first slow down in price increases in a year and a half.
Excluding food and energy, prices were up 4.9 percent compared with a year ago, down from 5.2 percent in March and 5.3 percent in February. The so-called core prices rose 0.3 percent compared with March, the third consecutive rise of three-tenths of a percentage point. Prices rose 0.4 percent in January and 0.5 percent month-over-month in each of December, November, and October.
The decline in year-over-year inflation partly reflects the extraordinarily high level of inflation hit over a year ago, when inflation rose to a level not seen since the financial crisis.
The personal consumption expenditure index is the Commerce Department’s inflation gauge. It is seen by Federal Reserve officials as more accurately measuring price stability than the more familiar Consumer Price Index compiled by the Department of Labor. Fed officials use it when forecasting inflation and their target of two percent average inflation over time is based on PCE prices. CPI sources data from consumers, while PCE sources from businesses. PCE tends to run a bit lower than CPI but usually moves in the same direction.