And as for inflation specifically, the Consumer Price Index (CPI) was lower than forecast for both the month-over-month and year-over-year periods. While the annual level of 5.0% continues to be markedly higher than the Federal Reserve’s target of 2.0%, this month’s reading represents continued movement toward the desired level.
A key contributor to this month’s lower reading was a decline in the energy component of the CPI as both gasoline and fuel oil were lower year-over-year. This impact of lower energy prices may prove to be temporary as recently announced production cuts by OPEC start to work their way into fuel prices.
In fact, the price of a barrel of West Texas Intermediate crude has risen from $75.68 on March 31 to a current level of $83.26.