The Consumer Price Index (CPI), which measures overall inflation of the U.S. dollar, rose 0.8% in April, capping off the largest 12-month jump in prices since the period ending September 2008 after the beginning of the Great Recession.
The Department of Labor released data tracking inflation in the U.S. on Wednesday morning. The April jump in CPI was driven by a 10% price hike on used cars and trucks, the largest jump for that market on record. Automakers cut production early in the pandemic and rental agencies slashed fleet purchases, leading to a shortage of used vehicles. Demand has also soared because many Americans have dollars to spend from government stimulus payments and need cars to get around because of the slow return of public transportation as the pandemic eases.
Americans are also rushing to dine out, travel or go far away for vacation, activities they shied away from during the pandemic. That’s also driving up prices at popular vacation resorts and other venues where people plan to congregate. Senior Federal Reserve officials, who are supposed to protect the U.S. from high inflation, insist the increase is temporary. They contend inflation will subside by next year once the pandemic fades, most people go back to work and the global economy is largely recovered.