US inflation might have dipped last month from 40-year high

WASHINGTON (AP) — After a year of soaring prices for gas, food and other necessities, inflation may have eased slightly in April from a 40-year high, the first slowdown after seven consecutive months of worsening price increases.

The government is expected to report Wednesday that consumer prices jumped 8.1% last month compared with a year earlier, according to a survey of economists by data provider FactSet. That would be down from the 8.5% year-over-year surge in March, the highest since 1981.

The forecasted drop in annual inflation, if it occurs, would add to other signs that consumer inflation may finally be peaking. Month-to-month price increases are also easing, along with some other inflation gauges.

Yet the April rate would still mark the second-highest inflation in four decades and an ongoing burden for families, especially lower-income Americans. And it would be only a modest step in a likely long and arduous road back to the mild 2% inflation that the Fed has set as its target level. Many economists expect annual price increases to settle into a 5% to 6% range by year's end, a historically high level that will probably exceed average wage gains.

“It’s too early to declare victory,” said Jose Torres, senior economist at Interactive Brokers. “It’s not going to get any worse, but it’s still at an uncomfortably high level.”

Beyond the financial strain for households, inflation is posing a serious political problem for President Joe Biden and congressional Democrats in the midterm election season, with Republicans arguing that Biden's $1.9 trillion financial support package last March overheated the economy by flooding it with stimulus checks, enhanced unemployment aid and child tax credit payments.

Biden sought to take the initiative Tuesday and declared...