US Core CPI saw largest ever monthly decline on record in April

Headline inflation dropped in line with estimates by the most since December 2008, after falling 0.4pct in March. Energy, transport and apparel were the main negative contributors, reflecting a full month of significantly lower prices in these components.


Core inflation, which excludes food and energy costs, came in three-tenths below estimates and down from the March reading of 2.1pct y/y. The m/m print fell 0.4pct, missing forecasts by two-tenths from the prior drop of 0.1pct. This was the largest-ever monthly decline. Many analysts say the BLS had data collection and estimation issues with some businesses closed and services cancelled. This indicates that interpolation methods were used with potentially uncertain implications.


The y/y headline reading missed estimates for a rise of 0.4pct, after increasing 1.5pct in March. This was the smallest 12-month gain since October 2016. In contrast, the food index rose 3.5pct y/y, its largest rise since February 2012.