The CPI rose 3.1 percent year-over-year in April, down sharply from the 9.1 percent peak in 2022, but the moderation provides limited comfort to families still absorbing the cumulative effect of four years of elevated inflation. The price level for groceries, rent, and insurance remains 25 to 35 percent above 2021 levels, a permanent increase that wages have not fully offset for most households.
The Federal Reserve defines its 2 percent inflation target relative to annual changes, not price levels, meaning it will consider the job done when inflation returns to 2 percent even though the price increases of the past four years are not reversed. This distinction, rarely explained in public communications, is a source of significant frustration among consumers and a political vulnerability for incumbents trying to claim credit for defeating inflation.
