U.S. consumers are continuing to pay higher prices for goods and services, but the rate of increase edged down ever so slightly in April. The Consumer Price Index (CPI) for All Urban Consumers, a measure of price changes commonly referred to as the inflation rate, increased 8.3% in the year-ending April 2022, according to the Bureau of Labor Statistics. That was down from the 8.5% annual increase in March, ending a seven-month streak of escalating prices. Still, inflation has been at 40-year highs for six consecutive months, the biggest price surges since the 1981-1982 time period, when the country was in a severe economic recession. Accounting for much of the recent increase, energy prices were up 30.3% in the year-ending April, with fuel oil prices surging 80.5% and gasoline prices jumping 43.6%, as the war in Ukraine has driven up energy costs. Food prices continued to edge higher, climbing 9.4% on an annual basis, with the increase in the price of meat, poultry, fish and eggs (14.3%) heavily contributing to that upturn. The recent overall increase in consumer prices was also partly attributed to surging prices of pre-owned vehicles, as the price of used cars and trucks were up 22.7% in the year-ending April, though that was down from the 35.3% annual increase in March. Additionally, the cost of airline fares surged 33.3% over the past year. Excluding food and energy prices, which can be volatile, the core CPI rose 6.2% year-over-year. While less than the surge in the all-items index, it was still one of the sharpest increases since 1982. Recent inflation reflects a surge in demand and shortages in materials and labor. To slow demand and reduce inflation, the Federal Reserve System (FED) increased the borrowing rate by 25 basis points in March, the first increase since December 2018. And in early May, the FED raised interest rates 50 basis points, the biggest rate hike in 22 years. More rate hikes are expected throughout the remainder of 2022, likely taking the funds rate to 2% to 3% by year’s end. The benchmark federal funds rate had been near zero since the beginning of the COVID-19 pandemic. Pandemic-related lockdowns in China and the war in Ukraine will likely continue to put price pressures on food and energy and impact the already battered supply chains.