WASHINGTON — A worrisome bout of inflation struck the U.S. economy in April, with consumer prices for goods and services surging 0.8% — the largest monthly jump in more than a decade — and the year-over-year increase reaching its fastest rate since 2008.
The acceleration in prices, which has been building for months, has unsettled financial markets and raised concerns that it could weaken the economic recovery from the pandemic recession.
Wednesday's report from the Labor Department showed sharply higher prices for everything from food and clothes to housing. A 10% surge in the prices of used cars and trucks — a record jump — accounted for roughly one-third of last month's overall increases.
The cost of new cars was up 0.5%, the largest increase since last July. Prices for vehicles, both used and new, have been soaring as a result of heavy demand and a computer chip shortage that has slowed auto production and reduced dealer supplies.
Over the past 12 months, consumer prices have jumped 4.2% — the fastest rise since a 4.9% gain in the 12 months that ended in September 2008. Excluding volatile food and energy, core inflation rose 0.9% in April and 3% over the past 12 months.
In the metropolitan area, prices rose 3.2% percent last month compared with April 2020. That's "the largest over-the-year increase since October 2011," said Martin Kohli, chief regional economist for the department's Bureau of Labor Statistics in Manhattan.
The cost of gasoline was a key culprit, climbing 29% from April 2020, when prices slumped during the pandemic shutdown. Electricity and natural gas prices were up 6.6% and 4.9%, respectively.
Mirroring the national trend, the cost of automobiles and home furnishings spiked last month compared with a year earlier, due to COVID-19 production delays.
In the metro area, prices for used vehicles shot up 20.7%, year over year, while new car prices were up 3.3%.
Prices for furniture and other home furnishings increased 7.4%, "the largest over-the-year increase since October 1981," Kohli said.
After years of dormant inflation, and the Federal Reserve seeking an inflation rate of 2%, worries about rising prices have shot to the top of economic concerns. Shortages of goods and parts related to disrupted supply chains have been a key factor.
The Fed has repeatedly expressed its belief that inflation will prove temporary as supply bottlenecks are unclogged. But some economists have expressed concern that as the economic recovery accelerates, fueled by rising demand from consumers spending freely again, so will inflation.
With James T. Madore