The Labor Department reported Wednesday that the Consumer Price Index, a measure of prices paid for goods and services, including housing and energy costs, rose 4.2% from where it was a year ago. Economists had predicted only a 3.6% increase. Inflation rose by 0.8% in April vs. the expected 0.2% increase.
Because food and energy prices can change quickly with supply or demand shocks, a more stable measure of inflation is core CPI, which excludes those prices. Core CPI increased 3% over the last year and 0.9% in April. The estimated increases were 2.3% and 0.3% respectively.
An inflation increase of 4.2% is the fastest increase in inflation since 2008.