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The latest Consumer Price Index report released Wednesday showed U.S. inflation eased to 4.9% in April compared to a year ago, which is the smallest 12-month increase since April of 2021.

The stock market was up in early trading after the release of the CPI data showing that inflation, although still above the Federal Reserve’s 2% target rate, is decelerating.  The Federal Reserve has raised interest rates 10 consecutive times in the past 14 months in an effort to curb inflation by making it more expensive for businesses and consumers to borrow money.

Viewed on a monthly basis, the CPI increased just 0.4% in April on a seasonally adjusted basis, as it also did in March. Among the largest contributors to the monthly all-items increase were used cars and trucks (+4.4%), gasoline (+3%) and shelter (+0.4%).

The increase in the gasoline index more than offset declines in other energy component indexes, and the overall energy index rose 0.6% in April. The food index was unchanged in April, as it was in March. Other indexes that increased on a monthly basis in April were motor vehicle insurance, recreation, household furnishings and operations, and personal care.

The index for airline fares (-2.6%) and the index for new vehicles (-0.2%) were among those that decreased over the month.

Viewed on an annual basis, the 4.9% all-items index increase for the 12 months ending in April of 2023 was the smallest annual rate of increase in two years. The all items less food and energy index rose 5.5% over that 12-month period. The energy index decreased 5.1% for the 12 months ending April, and the food index increased 7.7% over the same period.